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    short-run labor demand curve

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    Consider a firms short run decision to hire workers. assume that a firm produces goods for sale in a perfectly competitive market. labor markets are competitive as well. assume the production function is Q=40L-3L(squared). One unit of a good is sold for $2

    a) why does capital not appear in the production function?

    b) derive the short-run labor demand curve. (simply plug numbers in to approximate)

    c) assuming the wage rate is $25/hour, how many workers will this firm hire in the short run?

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    Solution Preview

    econ
    ________________________________________
    consider a firms short run decision to hire workers. assume that a firm produces goods for sale in a perfectly competitive market. labor markets are competitive as well. assume the production function is Q=40L-3L(squared). One unit of a good is sold for $2

    a) why does capital not appear in the production function?

    Ans :
    As the production function in the above example is given for short run, the capital stock was assumed to be ...

    Solution Summary

    The short-run labor demand curve is examined.

    $2.19