$1.$ The demand for labor

Consider Live Happley Fields, a small player in the strawberry business whose production has no individual effect on wages and prices. Live Happley$$s production schedule for strawberries is given in the following table:

Labor Input

Total Output

$($Number of workers$)$

$($Pounds of strawberries$)$

$00$

$120$

$238$

$354$

$468$

$580$

Suppose that the market wage for strawberry pickers is $$200$ per worker per day, and the price of strawberries is $$13$ per pound.

On the following graph, use the blue points $($circle symbol$)$ to plot Live Happley$$s labor demand curve when the output price is $$13$ per pound.

Note: Remember to plot each point between the two integers. For example, when the number of workers increases from $0$ to $1,$ the marginal revenue product of the first worker should be plotted with a horizontal coordinate of $0\mathrm{.}5,$ the value halfway between $0$ and $1.$ Line segments will automatically connect the points.

Demand P $=$ $$13$

Demand P $=$ $$15$

$0$

$1$

$2$

$3$

$4$

$5$

$300$

$270$

$240$

$210$

$180$

$150$

$120$

$90$

$60$

$30$

$0$

WAGE RATE $($Dollars per worker$)$

QUANTITY OF LABOR $($Number of workers$)$

At the given wage and price level, Live Happley should hire $.$

Suppose that the price of strawberries increases to $$15$ per pound, but the wage rate remains at $$200.$

On the previous graph, use the purple points $($diamond symbol$)$ to plot Live Happley$$s labor demand curve when the output price is $$15$ per pound.

Now Live Happley should hire when the output price is $$15$ per pound.

Assuming that all strawberry$-$producing firms have similar production schedules, an increase in the price of strawberries will cause the strawberry pickers to $.$

Suppose that wages increase to $$250$ due to an increased demand for workers in this market. Assuming that the price of strawberries remains at $$15$ per pound, Live Happley will now hire $.$

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