Question

Leadbelly Co. Sells pencils in a perfectly competitive product market and hires in a perfectly competitive labor market. assume that the market wage rate for workers is $150 per day.

A. What rule should Leadbelly follow to hire the profit-maximizing amount of labor?

B. At the profit-maximizing level of output, the marginal product of the last work or hired is 30 boxes of pencils per day. Calculate the Price of a box of pencils.

C. Draw a diagram of the labor market for pencil workers. Label the equilibrium wage and quantity of labor for both the market and the firm. How are these diagrams related?

D. Suppose some pencil workers switch to jobs in the growing computer industry. On the side-by-side diagrams from part C, show how this change affects the equilibrium wage and quantity of labor for both the pencil market and for Leadbelly. How does this change affect the marginal product of labor at Leadbelly?

rohit, What is the value of the 12 per hour the margnis maximizing vorker he hired? What is that worker's mar- his proit, what is the value of soulr uncle is oduct of ginal product? adbelly Co. sells pencils in a perfectly competitive roduct market and hires workers in a perfectl tive labor market. Assume that the mark pet- me that the market wage rate for y com workers is $150 per day at rule should Leadbelly follow to hire the profit-maximizing amount of labor? a. h. At the profit-maximizing level of output, the mar- ginal product of the last worker hired is 30 boxes of pencils per day. Calculate the price of a box of pencils c. Draw a diagram of the labor market for pencil work- ers (as in Figure 4 of this chapter) next to a diagram of the labor supply and deaand for Leadbelly Co. (as in Figure 3). Label the equilbions wage and quantity of labor for both the market and the firm. How are these diagrams related? growing computer industry. On the side-by-side diagrams from part (c), show how this change aftects the equilibrium wage and quantity of labor for both the pencil market and for Leadbelly. How does this change affect the marginal product of labor d. Suppose some pencil workers switch to jobs in the sometimes propose laws requiring firms to honefits, such as health insur- at Leadbelly? 8. Policymakers sometin fects of