A single firm is the only employer in a labour market. The marginal revenue product, labour supply, and marginal factor cost curves that it faces are displayed in the diagram below. Use this information to answer the following questions. 1. How many units of labour will this firm employ in order to maximize it's economic profits? 2. what hourly wage rate will this firm pay it's workers? 3. What is the total amount of wage payments that this firm will make to its workers each hour? Wage Rate, Marginal Factor Cost, and Marginal Revenue Product per Hour ($) 28 20 13 10 0 T 1 1 I 1 1 1 1 MFC MRP 1000 1600 Quantity of Labour per Time Period S
A single firm is the only employer in a labour market. The marginal revenue product, labour supply, and marginal factor cost curves that it faces are displayed in the diagram below. Use this information to answer the following questions. 1. How many units of labour will this firm employ in order to maximize it's economic profits? 2. what hourly wage rate will this firm pay it's workers? 3. What is the total amount of wage payments that this firm will make to its workers each hour? Wage Rate, Marginal Factor Cost, and Marginal Revenue Product per Hour ($) 28 20 13 10 0 T 1 1 I 1 1 1 1 MFC MRP 1000 1600 Quantity of Labour per Time Period S
Chapter10: Labor Markets And Income Distribution
Section: Chapter Questions
Problem 6SQP
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Transcribed Image Text:A single firm is the only employer in a labour market. The marginal revenue product, labour supply, and
marginal factor cost curves that it faces are displayed in the diagram below. Use this information to answer the
following questions.
1. How many units of labour will this firm employ in order to maximize it's economic profits?
2. what hourly wage rate will this firm pay it's workers?
3. What is the total amount of wage payments that this firm will make to its workers each hour?
per Hour ($)
Wage Rate, Marginal Factor Cost,
Revenue Product
and Marginal
28
20
13
10
0
1
3
1
C
S
X
MFC
MRP
1000
1600
Quantity of Labour per Time Period
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