The following labor demand table is for a firm that is hiring labor competitively and selling its product in a competitive market.

Competitive Labor Market

Units of Labor	Total Product	Marginal Product	Product Price	Total Revenue	Marginal Revenue Product
0	0		$2	$0
1	17	17	2	34	$34
2	31	14	2	62	28
3	43	12	2	86	24
4	53	10	2	106	20
5	60	7	2	120	14
6	65	5	2	130	10

Now determine the firm’s demand curve for labor, assuming that it is selling in an imperfectly competitive market and that, although it can sell 17 units at $2.20 per unit, it must lower product price by 5 cents in order to sell the marginal product of each successive labor unit.

Instructions: Round your responses to two decimal places in the table below.

Imperfectly Competitive Labor Market

Units of Labor	Total Product	Marginal Product	Product Price	Total Revenue	Marginal Revenue Product
0	0	na	na	$	na
1	17		$		$
2	31
3	43
4	53
5	60
6	65

Compare this demand curve with the one derived in a competitive market.

Answer rating: 100% (QA)

Units of Labor Total Product Marginal Product Pric... View the full answer