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Suppose that the employer is hiring workers in a perfectly competitive market where the market equilibrium wage is `$8`.

Graphing window shows horizontal axis: 0 to 14, vertical axis: 0 to 14. Start Graph, Color blue

xy
08
16
24
32
4-0
5-2
6-4
7-6
Label "Labor (L)" at pixel coordinates (175,0).Label "Wage (w)" at pixel coordinates (0,170).Label "VMPL" at (1,8-1).

How many workers will be hired at this wage?

The table below shows data for the production of soda for an individual firm operating in an imperfectly competitive market.

Number of workersNumber of ApplesMarginal Revenue
0020
109019
2016218
3021617
4025216
5027015
Given this data, complete the table:



 Quantity of soda  Marginal Product of Labor (MPL) Marginal Revenue Product of Labor (MRPL)
0 - -
10
20
30
40
50


Suppose that a firm has market power in their output market. Suppose that the employer is hiring workers in a perfectly competitive market where the market equilibrium wage is $.

The graph below shows the labor demand curve for this firm.

Note: VMPL stands for Value of the Marginal Product of Labor. MRPL stands for Marginal Revenue Product of Labor.

Graphing window shows horizontal axis: 0 to 30, vertical axis: 0 to 30. Start Graph, Color red
xy
037.5
136.5
235.5
334.5
433.5
532.5
631.5
730.5
829.5
928.5
1027.5
1126.5
1225.5
1324.5
1423.5
1522.5
1621.5
1720.5
1819.5
1918.5
2017.5
2116.5
2215.5
2314.5
2413.5
2512.5
2611.5
2710.5
289.5
298.5
307.5
Start Graph, Color blue
xy
037.5
135.5
233.5
331.5
429.5
527.5
625.5
723.5
821.5
919.5
1017.5
1115.5
1213.5
1311.5
149.5
157.5
165.5
173.5
181.5
19-0.5
20-2.5
21-4.5
22-6.5
23-8.5
24-10.5
25-12.5
26-14.5
Start Graph, Color black
xy
016
116
216
316
416
516
616
716
816
916
1016
1116
1216
1316
1416
1516
1616
1716
1816
1916
2016
2116
2216
2316
2416
2516
2616
2716
2816
2916
3016
Label "Labor (L)" at pixel coordinates (175,0).Label "Wage (w)" at pixel coordinates (0,170).Label "VMPL" at (10,450/12-10). Label "MRPL" at (10,450/12-15).

What is the number of workers that this firm will hire if this firm is selling its output in an imperfectly competitive market?

 

Suppose that a firm DOES NOT have market power in their output market. Suppose that the employer is hiring workers in a perfectly competitive market where the market equilibrium wage is $16.

The graph below shows the labor demand curve for this firm.

Note: VMPL stands for Value of the Marginal Product of Labor. MRPL stands for Marginal Revenue Product of Labor.

Graphing window shows horizontal axis: 0 to 30, vertical axis: 0 to 30. Start Graph, Color red
xy
039.167
138.167
237.167
336.167
435.167
534.167
633.167
732.167
831.167
930.167
1029.167
1128.167
1227.167
1326.167
1425.167
1524.167
1623.167
1722.167
1821.167
1920.167
2019.167
2118.167
2217.167
2316.167
2415.167
2514.167
2613.167
2712.167
2811.167
2910.167
309.167
Start Graph, Color blue
xy
039.167
137.167
235.167
333.167
431.167
529.167
627.167
725.167
823.167
921.167
1019.167
1117.167
1215.167
1313.167
1411.167
159.167
167.167
175.167
183.167
191.167
20-0.833
21-2.833
22-4.833
23-6.833
24-8.833
25-10.833
26-12.833
27-14.833
Start Graph, Color black
xy
012
112
212
312
412
512
612
712
812
912
1012
1112
1212
1312
1412
1512
1612
1712
1812
1912
2012
2112
2212
2312
2412
2512
2612
2712
2812
2912
3012
Label "Labor (L)" at pixel coordinates (175,0).Label "Wage (w)" at pixel coordinates (0,170).Label "VMPL" at (10,470/12-10). Label "MRPL" at (10,470/12-15).

What is the number of workers that would be hired if this firm would be selling its output in a perfectly competitive market?

 

The graph below shows the supply and demand curves for labor in a perfectly competitive market.

Graphing window shows horizontal axis: 0 to 13, vertical axis: 0 to 13. Start Graph, Color red

xy
02
13
24
35
46
57
68
79
810
911
1012
1113
1214
1315
Start Graph, Color blue
xy
012
111
210
39
48
57
66
75
84
93
102
111
120
13-1
Label "Labor (L) in thousands" at pixel coordinates (175,0).Label "Wage (w)" at pixel coordinates (0,170).Label "Demand" at (1,12+1). Label "Supply" at ((13-2)/ 1,11).

What is the equilibrium quantity of workers hired in this market?

thousand

 

The graph below shows the supply and demand curves for labor in a perfectly competitive market.

Graphing window shows horizontal axis: 0 to 13, vertical axis: 0 to 13. Start Graph, Color red

xy
04
15
26
37
48
59
610
711
812
913
1014
1115
1216
1317
Start Graph, Color blue
xy
012
111
210
39
48
57
66
75
84
93
102
111
120
13-1
Label "Labor (L) in thousands" at pixel coordinates (175,0).Label "Wage (w)" at pixel coordinates (0,170).Label "Demand" at (1,12+1). Label "Supply" at ((13-4)/ 1,11).

What is the equilibrium wage that will prevail in this market?

$