Problem
The marginal product of labor (measured in units of output) of a firm is given by MPN=A(200-N), Where A measures the productivity and N is the number of labor hours used in the production. Suppose the price of the output is $6 per unit and A = 0,02.
i. What will be the demand for labor if the nominal wage is $18?
ii. What will be the demand for labor if the nominal wage rises to $21?