E2 Q) The market demand for the output is P = 80 - Q, where Q is the output level and P is the price per unit ofoutput. A firm's production function is Q = 0.5L, where Q is the output level, and L is the amount of labor. Ifthe labor supply function is PL = 10 + 0.5L, what is the price of labor at the competitive equilibrium in thelabor market?Question 71 options:$20$25$30$40None of the above.

Business

Economics

E2

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: The Markets For The Factor Of Production

Section: Chapter Questions

Problem 3CQQ

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Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.

Question

Q) The market demand for the output is P = 80 - Q, where Q is the output level and P is the price per unit of
output. A firm's production function is Q = 0.5L, where Q is the output level, and L is the amount of labor. If
the labor supply function is PL = 10 + 0.5L, what is the price of labor at the competitive equilibrium in the
labor market?
Question 71 options:
$20
$25
$30
$40
None of the above.

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