Answer to Question #86098 in Microeconomics for prashant

Question

assuming monopoly in the commodity market and perfect competition in the factor market derive the demand curve for a variable factor when there are several variable factors.

Answer 1

Assuming monopoly in the commodity market and perfect competition in the factor market the demand curve for a variable factor is perfectly elastic and is a horizontal line for the factor market and is downward-sloping for the commodity market, if there are several variable factors.