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Satsume Satsume
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6 years ago
In a competitive labor market, the supply of labor curve is expressed as:
   AE = $5 + 0.0025L,        
where AE represents the average expenditure ($/unit) and L represents units of labor hired per unit of time.  The demand for labor is based on the following expression:
   MP =  5 - 0.001L,        
where MP represents marginal product of labor.  Revenue from the final good is $5 per unit sold in a competitive market.

a.   Determine the equilibrium wage rate and labor employment rate.
b.   Compute the economic rent earned by labor.
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Microeconomics

Microeconomics


Edition: 8th
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oracledarrenoracledarren
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Satsume Author
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6 years ago
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