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Question
Scenario 14.4:John's firm is a competitor in your product market and a monopsonist in the labor market. The current market price of the product that your firm produces is $2. The total product and marginal product of labor are given as:
TP = 100L - 0.125L2 MP = 100 - 0.25L
where L is the amount of labor employed. The supply curve for labor and the marginal expenditure curve for labor are given as follows:
L = PL -5 MEL = 2L + 5
Refer to Scenario 14.4. Suppose that the price of the product rises to $5. Which of the following curves shifts?
A) MP curve
B) MRP curve
C) Supply of labor curve
D) Marginal expenditure curve
Answer
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Q:
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Scenario 14.4:
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TP = 100L - 0.125L2 MP = 100 - 0.25L
where L is the amount of labor employed. The supply curve for labor and the marginal expenditure curve for labor are given as follows:
L = PL -5 MEL = 2L + 5
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A) Marginal product of labor
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Q:
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Q:
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