A firm hires labor in a perfectly competitive labor market. Its current profit-maximizing hourly output is 100
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A firm hires labor in a perfectly competitive labor market. Its current profit-maximizing hourly output is 100 units, which the firm sells at a price of $5 per unit. The marginal physical product of the last unit of labor employed is 5 units per hour. The firm pays each worker an hourly wage of $15.
a. What marginal revenue does the firm earn from sale of the output produced by the last worker employed?
b. Does this firm sell its output in a perfectly competitive market?
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a Marginal revenue is equal to price into marginal physical product ...View the full answer
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