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The firm's elasticity of demand for labor is -0.5. The firm sells its output at $20 per unit, and the wage rate is $15 per hour. Suppose the firm experiences an increase in productivity such that at every level of employment its output is 200 units hour greater than before. What will happen to the number of workers hired by the firm?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M92761891

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