Top Posters
Since Sunday
5
o
5
4
m
4
b
4
x
4
a
4
l
4
t
4
S
4
m
3
s
3
New Topic  
toripollard8 toripollard8
wrote...
Posts: 486
4 years ago

Question 1.

A firm's labor demand curve is also its marginal revenue product curve. For both the perfectly competitive firm and the output price maker, the labor demand curve slopes downwards. However, there is a difference in the reasons why the labor demand curve slopes downwards. What is this difference?



Question 2.

Table 17-5

Number of MechanicsOil Changes per DayMarginal ProductMarginal Revenue Product
1  6
212
317
421
524
626

Refer to Table 17-5. Oil Can Harry's, a new automobile service shop, is ready to start hiring. The table above shows the relationship between the number of mechanics the firm hires and the quantity of oil changes it produces.

a.

Suppose the price of an oil change is $20. Complete the table by filling in the values for
marginal product and marginal revenue product.

b.

Oil Can Harry's is an input price-taker. Suppose the wage paid to mechanics is $80 per day.
What is the profit-maximizing number of mechanics?

c.

Suppose the wage rate rises to $100 per day.

(i) What happens to the firm's demand curve for mechanics?

(ii) What happens to the profit-maximizing quantity of mechanics?

d.

Suppose the wage rate is $60 per day and the price of an oil change is now $15.

(i) What happens to the firm's demand curve for mechanics?

(ii) What happens to the profit-maximizing quantity of mechanics?

Textbook 
InMicro

InMicro


Edition: 1st
Authors:
Read 242 times
4 Replies
Replies
Answer verified by a subject expert
qwer34qwer34
wrote...
Posts: 376
4 years ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
This verified answer contains over 960 words.
1

Related Topics

toripollard8 Author
wrote...
4 years ago
Thanks for your help!
wrote...
3 years ago
Thank you
wrote...
3 years ago
thank you
New Topic      
Explore
Post your homework questions and get free online help from our incredible volunteers
  933 People Browsing
Related Images
  
 984
  
 232
  
 46
Your Opinion

Previous poll results: Who's your favorite biologist?