714
Assume the demand curve for a firm’s product is as shown below and that the firm can hire as many workers as it wants for a wage of $80 per day.
1 point: The firm hires labor in a perfectly competitive labor market.
1 point: The firm is a price-
1 point: The firm sells its good in a perfectly competitive product market.
1 point: The horizontal demand curve indicates that the firm is a price-
1 point: the additional cost of hiring one more unit of a factor
1 point: $80
1 point: $100
1 point: MRPL = MPL × MR, MPL = 20, MR = $5, so MRPL = 20 × $5 = $100.