Question: Suppose that labor is the only input used by a perfectly competitive firm. The firm's production function is as follows: Days of LaborUnits of Output

Suppose that labor is the only input used by a perfectly competitive firm. The firm's production function is as follows:

Days of LaborUnits of Output

0 days 0 units

1 7

2 13

3 19

4 25

5 28

6 29

7 29

a. Calculate the marginal product for each additional worker.

b. Each unit of output sells for $10. Calculate the value of the marginal product of each worker.

c. Compute the demand schedule showing the number of workers hired for all wages from zero to $100 a day.

d. Graph the firm's demand curve.

e. What happens to this demand curve if the price of output rises from $10 to $12 per unit?

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