Suppose that labour supply is perfectly elastic at an hourly wage of $27.4 up to a quantity of labour of 7809 and for an hourly wage greater than or equal to $27.4 the labour supply curve is Ls = -7809 + 570W. The labour demand curve is Ld = 48100 – 690W. Calculate the total amount of economic rent at the market equilibrium.

Suppose that labour supply is perfectly elastic at an hourly wage of $27.4 up to a quantity of labour of 7809 and for an hourly wage greater than or equal to $27.4 the labour supply curve is Ls = -7809 + 570W. The labour demand curve is Ld = 48100 – 690W. Calculate the total amount of economic rent at the market equilibrium.

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter18: Pricing The Factors Of Production

Section: Chapter Questions

Problem 7DQ

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