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Finding the Quantity to Hire:
Competitive Labor Market in a Competitive Product
Market
Finding the Quantity to Hire:
Competitive Labor Market in an Imperfectly Competitive
Product Market
Competitive Labor Market in a
Competitive Product Market -
Problem 1
Answer the questions
below on the basis of the information given in the
following table.
The labor market is competitive where the wage rate is
$10.
Refer to the above data. How can
you tell that this firm is selling its product in a
purely competitive product market?
MULTIPLE CHOICE: Refer to the
above data. If the firm is hiring workers under purely
competitive conditions at a wage rate of $10, it will
employ:
A. 2 workers
B. 3 workers
C. 4 workers
D. 5 workers
Refer to the above data. What is
the labor demand schedule for this firm?
Refer to the above data. What is
the allocatively efficient quantity to hire?
Competitive Labor Market in a
Competitive Product Market -
Problem 2
Use the data above to calculate:
(1) the quantity of labor that this firm will hire to
maximize profits, and (2) the allocatively efficient
quantity to hire.
Assume the firms hires labor, its
only variable input, under competitive conditions at a
wage rate of $70 and sells its products under competitive
conditions for a price of $10.
Competitive Labor Market in an
Imperfectly Competitive Product Market - Problem 1
Answer this questions
below on the basis of the information given in the
following table.
The labor market is competitive
where the wage rate is $10.
Refer to the above data. How can
you tell that this firm is selling its product in an
imperfectly competitive product market like a monoploy,
oligopoly, or monopolistic competition?
MULTIPLE CHOICE: Refer to the
above data. If the firm is hiring workers under purely
competitive conditions at a wage rate of $10, it will
employ:
A. 2 workers
B. 3 workers
C. 4 workers
D. 5 workers
Refer to the above data. What is
the allocatively efficient quantity to hire?
Competitive Labor Market in an
Imperfectly Competitive Product Market - Problem
2
Use the data above to calculate:
(1) the quantity of labor that this firm will hire to
maximize profits, and (2) the allocatively efficient
quantity to hire.
Assume the firms hires labor, its
only variable input, under competitive conditions at a
wage rate of $70 and sells its products under imperfectly
competitive (monopoly) conditions at the prices
listed.
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