Question:
Fill in the blanks for this company:
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MARGINAL
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ADDITIONAL
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PRODUCT
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MARGINAL
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PROFIT FROM
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OF LABOR
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REVENUE
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HIRING
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NUMBER
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OUTPUT OF
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(TELEVISION
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PRODUCT
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WAGE
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ONE MORE
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OF
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TELEVISIONS
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SETS
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PRODUCT
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OF LABOR
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(DOLLARS
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WORKER
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WORKERS
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PER WEEK
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PER WEEK)
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PRICE
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(DOLLARS
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PER WEEK)
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(DOLLARS
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(C)
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(0)
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{MP)
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(PI
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PER WEEK)
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(W)
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PER WEEK)
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0
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0
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$300
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$1,800
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1
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8
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300
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1,800
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2
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15
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300
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1,800
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3
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21
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300
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1,800
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4
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26
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300
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1,800
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5
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30
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300
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1,800
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6
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33
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300
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1,800
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a) From the information in the table you will need to determine whether the firm is a price taker or a price maker. Which one is it? briefly explain why?
b) Use the information from the table to draw a graph that shows the demand for labor by this firm. Be sure to label the profit maximizing quantity of labor on your graph.
c) Next, if the wage rate declines to $1500 per week, what quantity of labor will now be demanded by the firm? briefly explain what happens. Show the changes in your graph.
d) If the price for each output level doubles, what quantity of labor will now be demanded?