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

Output

(Number of workers)

(Pounds of strawberries)

0 0

1 8

2 15

3 21

4 26

5 30

Suppose that the market wage for strawberry pickers is $80 per worker per day, and the price of strawberries is $15 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 $15 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 value of the marginal product of for the first worker should be plotted with a horizontal coordinate of 0.5, the value halfway between 0 and 1. Line segments will automatically connect the points.

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

Suppose that the price of strawberries increases to $18 per pound, but the wage rate remains at $80.

On the previous graph, use the purple points (diamond symbol) to plot Live Happley's labor demand curve when the output price is $18 per pound.

Now Live Happley should hirewhen the output price is $18 per pound.

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

Suppose that wages increase to $110 due to an increased demand for workers in this market. Assuming that the price of strawberries remains at $18 per pound, Live Happley will now hire.