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

Days of Labor Units 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?