Question

Suppose that for the firm in Problem $29-9$, the goods market is perfectly competitive. The market price of the product the firm produces is $\$4$ at each quantity supplied by the firm. What is the amount of labor that this profit-maximizing firm will hire, and what wage rate will it pay?

Short answer

The level of $13$labors, the wage rate paid to the worker is $\$8$.

Step-by-step solution

Introduction

Financial performance is the short- or long-run technique from which a business makes the market, input, and value of output that resulting in a most gain. The enterprise is generally depicted as generating revenue in neo - classical, that is now the higher category to cost accounting.

Given Information

In the perfect competition, the labor market equilibrium occurs where marginal factor cost equal marginal revenue product.

Explanation

The evaluation of marginal utility and negligible material expense is shown in table under.

As $13$workforces are acquired, the effective material steadily the sales price product, as is shown in the table ahead. Thus, the amount of labor hired by a competitive firm is $13$labors. At the level of $13$ labors, the wage rate paid to the worker is $\$8$.