1. Consider a firm whose MRP_L=60-0.25L. If the market wage is 20, how much labor does the firm use? (Answer format is number only, ie. 35, not L=35). (Answer is not 35).

2. The same firm as in Q9 is now offered a subsidy of $5 per worker by the government to increase employment. The market wage remains w=20. How much labor does the firm now hire?

Answer rating: 100% (QA)

Finding the Firms Labor Demand 1 Without Subsidy MRPL ... View the full answer