Complete the firms new short run labor demand schedule in, Ask an Expert

Economics

Suppose an increase in the market demand for widgets pushes up their price to $7. If this firm continues to buy labor in a competitive labor market at a wage of $20 per unit;

1. How much labor would the firm hire, and why?

2. How many widgets would the firm produce in a day?

3. How much revenue would the firm get per day?

4. How much income would the firm's laborers receive, in total?

5. If the firm's fixed cost is $100 per day and labor is the firm's only variable resource, how much profit (or loss) will the firm make per day?

6. Complete the firm's new short run labor demand schedule in the table below and plot the information on the graph above. Label the curve D2. What does the increase in the demand for widgets do to the demand for the labor used to produce widgets?

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M9495139

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