Explore BrainMass

Explore BrainMass

    price taker

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Please see attached table

    a) From the information in the table you will need to determine whether the firm is a price taker or a price maker. Which one is it? briefly explain why?

    b) Use the information from the table to draw a graph that shows the demand for labor by this firm. Be sure to label the profit maximizing quantity of labor on your graph.

    c) Next, if the wage rate declines to $1500 per week, what quantity of labor will now be demanded by the firm? briefly explain what happens. Show the changes in your graph.

    d) If the price for each output level doubles, what quantity of labor will now be demanded?

    Thanks a lot for your help.

    © BrainMass Inc. brainmass.com October 10, 2019, 12:21 am ad1c9bdddf


    Solution Preview

    a. The company is a price taker because regardless of the quantity it produces (output), the price remains the same.

    b. See attached for an excel sheet with numbers and a graph. The profit maximizing is 2 (though you ...

    Solution Summary

    Evaluates this company as a price taker in this case.