Leadbelly Co. sells pencils in a perfectly competitive product market and hires workers in a perfectly competitive labor market. Assume that the market wage rate for workers is $120 per day. Leadbelly should follow this rule to hire the profit-maximizing amount of labor: Hire workers up to the point where the is $120 per day. At the profit-maximizing level of output, the marginal product of the last worker hired is 40 boxes of pencils per day. The price of a box of pencils is $ The following graphs show the labor market for pencil workers and the labor supply and demand for Leadbelly Co. Suppose some pencil workers switch to jobs in the growing computer industry. Show how this change affects the pencil market by shifting the labor-demand curve, labor-supply curve, or both. Wage 240 216 192 168 144 120 96 72 48 24 0 Pencil Market Quantity of Labor Supply Demand Demand 1T Supply
Leadbelly Co. sells pencils in a perfectly competitive product market and hires workers in a perfectly competitive labor market. Assume that the market wage rate for workers is $120 per day. Leadbelly should follow this rule to hire the profit-maximizing amount of labor: Hire workers up to the point where the is $120 per day. At the profit-maximizing level of output, the marginal product of the last worker hired is 40 boxes of pencils per day. The price of a box of pencils is $ The following graphs show the labor market for pencil workers and the labor supply and demand for Leadbelly Co. Suppose some pencil workers switch to jobs in the growing computer industry. Show how this change affects the pencil market by shifting the labor-demand curve, labor-supply curve, or both. Wage 240 216 192 168 144 120 96 72 48 24 0 Pencil Market Quantity of Labor Supply Demand Demand 1T Supply
Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter18: The Markets For The Factor Of Production
Section: Chapter Questions
Problem 3PA
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Transcribed Image Text:Leadbelly Co. sells pencils in a perfectly competitive product market and hires workers in a perfectly competitive labor market. Assume that the
market wage rate for workers is $120 per day.
Leadbelly should follow this rule to hire the profit-maximizing amount of labor: Hire workers up to the point where the
is
$120 per day.
At the profit-maximizing level of output, the marginal product of the last worker hired is 40 boxes of pencils per day.
The price of a box of pencils is $
The following graphs show the labor market for pencil workers and the labor supply and demand for Leadbelly Co. Suppose some pencil workers
switch to jobs in the growing computer industry.
Show how this change affects the pencil market by shifting the labor-demand curve, labor-supply curve, or both.
Wage
240
216
192
168
144
120
96
72
48
24
0
Pencil Market
Quantity of Labor
Supply
Demand
Demand
1T
Supply
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