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Investment, time, and capital markets

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I have three questions and I am not sure what equations to use to solve the problems.

What equation do I use to determine how much labor the firm should employ?

A firm's demand curve and its total product of labor are detailed in the charts below.

The firm's demand curve for its product is as follows:

Quantity of Price of
Output the Good
25 9
40 8
54 7
67 6
79 5
90 4

Labor is the firm's only variable input of production, and the total product of labor is:

Units of Total
Labor Output
2 25
3 40
4 54
5 67
6 79
7 90
How much labor should the firm employ if labor costs $30 a unit?
a. 3 units of labor
b. 4 units of labor
c. 5 units of labor
d. 6 units of labor
e. 7 units of labor

Given the information in the diagram at the right, the monopsony wage rate is:
a. W1. b. W2.
c. W3. d. W4.
e. none of the above.

According to the diagram at the right, the bilateral monopoly wage rate is:
a. W1. b. W2.
c. W3. d. W4.
e. any of the above.

I am not sure how to start. I don't know how to get started.

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Jayant Kumar, MBA
Education
  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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