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    Calculating the optimal hours of labor

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    Firm XYZ measures its MP of labor curve to be the following MP = 4000 - 2L where L is the number of hours of labor hired per day. XYZ produces gadgets that are sold for $20 each and is able to hire workers for $10 per hour. How many hours of labor should XYZ hire each day to maximize its profits?

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    Marginal Cost of worker=wage rate=$10 per hour

    Marginal Revenue ...

    Solution Summary

    The solution describes the steps to calculate the optimal hours of labor.