increase in demand
Not what you're looking for?
The following table describes the VMPs of 10 workers in a hypothetical labor market.
Worker VMP/hour
1 $10
2 $20
..
9 $90
10 $100
Further assume that Firm 1 pays a worker a piece rate and Firm 2 pays a time rate equal to $40/hour.
(a) How do workers sort themselves across firms?
(b) What happens if there is an increase in demand that increases the price of the firm's product by 10%?
(c) What is there is an increase in demand that increases the price of the product by 20%?
Purchase this Solution
Solution Summary
Explores the increases in demand.
Purchase this Solution
Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.