Answer to Question #83440 in Microeconomics for parii

Question #83440
Suppose a single firm has the marginal revenue product schedule for a particular type of labour given in the following table.
Number of units of labour MRP of labour
1 $12 2 11 3 10 4 9 5 8 6 7 7 6 8 5 (a) Assume there are 150 firms with the same marginal-revenue-product schedules for this particular type of labour. Compute the total or market demand for this labour by completing column 1 in the table below. (1) Quantity of labour demanded (2) Wage rate (3) Quantity of labour supplied _____$12 1350
_____ 11 1200
_____ 10 1050
_____ 9 900
_____ 8 750
_____ 7 600
_____ 6 450
_____ 5 300
(b) What will be the equilibrium wage rate and how many workers will be hired?
(c) How would the imposition of a $9 minimum wage rate change the total amount of labor hired in this market? 1 Expert's answer 2018-12-04T08:31:10-0500 L MRP 1$12

2 11

3 10

4 9

5 8

6 7

7 6

8 5

(a) Assume there are 150 firms with the same marginal-revenue-product schedules

for this particular type of labour. Compute the total or market demand for this labour

by completing column 1 in the table below.

(1)

QDL = 150*L

QDL w QSL

150 $12 1350 300 11 1200 450 10 1050 600 9 900 750 8 750 900 7 600 1050 6 450 1200 5 300 (b) At equilibrium QDL = QSL, so the equilibrium wage rate is$8 and 750 workers will be hired.

(c) The imposition of a \$9 minimum wage rate will decrease the total amount of labor hired in this market to 600 workers.

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