Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter14: Labor Markets And Income
Section: Chapter Questions
Problem 1SCQ: Table 14.10 shows levels of employment (Labor), the marginal product at each of those levels, and...
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Question
Differentiate MRP in a purely competitive market from MRP in an imperfectly competitive market through the use of the table.
![CHAPTER 16 The
TABLE 16.2 The Demand for Labor: Imperfect Competition in the Sale of the Product
(1)
Units of
(2)
Total Product
(Output)
(3)
Marginal
Product (MP)
(4)
Product
Price
(5)
Total Revenue,
(6)
Marginal Revenue
Product (MRP)
Resource
(2) x (4)
$2.80
%$4
1
7
2.60
$18.20
18.20
2
13:
13.00
2.40
31.20
18:
2.20
39.60:
8.40
22
2.00
44.00:
4.40
25
1.85
2.25
46.25
2
6
27
1.75
1.00
47.25
7
28
1.65
46.20
-1.05
Similarly, the third worker adds 5 units to total product, and these units are worth
$2.20 each, or $11 total. But to sell these 5 units, the firm must take a 20-cent price cut on the
13 units produced by the first two workers. So the third worker's MRP is only $8.40 [= $11 –
(13 x 20 cents)]. The numbers in column 6 reflect such calculations.
In Figure 16.2 we graph the MRP data from Table 16.2 and label it "D = MRP (imperfect](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5f57f765-e0ed-4b24-8a47-f5dc4321e447%2F1983c72c-abc1-4660-a121-3b2149ff806a%2F94iwnde_processed.jpeg&w=3840&q=75)
Transcribed Image Text:CHAPTER 16 The
TABLE 16.2 The Demand for Labor: Imperfect Competition in the Sale of the Product
(1)
Units of
(2)
Total Product
(Output)
(3)
Marginal
Product (MP)
(4)
Product
Price
(5)
Total Revenue,
(6)
Marginal Revenue
Product (MRP)
Resource
(2) x (4)
$2.80
%$4
1
7
2.60
$18.20
18.20
2
13:
13.00
2.40
31.20
18:
2.20
39.60:
8.40
22
2.00
44.00:
4.40
25
1.85
2.25
46.25
2
6
27
1.75
1.00
47.25
7
28
1.65
46.20
-1.05
Similarly, the third worker adds 5 units to total product, and these units are worth
$2.20 each, or $11 total. But to sell these 5 units, the firm must take a 20-cent price cut on the
13 units produced by the first two workers. So the third worker's MRP is only $8.40 [= $11 –
(13 x 20 cents)]. The numbers in column 6 reflect such calculations.
In Figure 16.2 we graph the MRP data from Table 16.2 and label it "D = MRP (imperfect
Transcribed Image Text:bl CHAPTER 16 The Dem
TABLE 16.1 The Demand for Labor: Pure Competition in the Sale of the Product
(6)
Marginal Revenue
Product (MRP)
(4) (2)
(1)
(2)
Total Product
(Output)
(3)
Marginal
Product (MP)
(4)
Product
Price
(5)
Total Revenue,
Units of
Resource
(2) x (4)
$2
$0,
$14
1
2
14
2
13:
26
12
3
18
2
36
10
寸
22
44
3
25
2
50
2
4
6.
27
54
1
2
28
2
56
Product Price The derived demand for a resource depends also on the price of the product it
produces. Column 4 in Table 16.1 adds this price information. Product price is constant, in this
case at $2, because the product market is competitive. The firm is a price taker and cannot there-
fore sell at any price higher than $2 per unit.
Multiplying column 2 by column 4 provides the totalrevenue data of column 5 From tho00
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