Higher wage rate increases firms marginal costs

Assignment Help Business Economics

Reference no: EM131112258

Consider the usual case where a higher wage rate increases a firms’ marginal costs. In this case, the industry’s demand curve for labor a. is more wage inelastic than the individual firms’ demand curves would indicate. b. coincides with the horizontal sum of individual firms’ demand curves. c. contains only substitution effects but no scale effects. d. is horizontal at the going wage rate.

Reference no: EM131112258

Questions Cloud

Discuss the history of poverty : Discuss the history of poverty in the United States from the late 19th Century through the present using exampls from each of the following categories.

Expansion into the west-imperialism and immigration : Discuss the history of poverty in the United States from the late 19th Century through the present using exampls from each of the following categories. Expansion into the West, Native Americans, Imperialism, Immigration

Firms are submitting bid to offer their firm services : Suppose n firms are submitting a bid to offer their firm’s services. Your cost of providing the service is c. All of the firms will submit sealed bids. The procurement officer will look at all of the bids and select the lowest bid but pay to the lowe..

Credit ratings of leading banks due to large debt write-offs : The economy of country Rumblen was hit by a banking crisis which led to a recession. Jason Wallace, a real estate agent, says that the economy will recover soon because the government is taking various measures to counter the recession. Some banks in..

Higher wage rate increases firms marginal costs : Consider the usual case where a higher wage rate increases a firms’ marginal costs. In this case, the industry’s demand curve for labor a. is more wage inelastic than the individual firms’ demand curves would indicate. b. coincides with the horizonta..

Find the profit-maximizing number of separate labs : Moli Labs Inc. is developing medical research on a certain anti-laziness pill. It is estimated that the lifetime value of the patent on this pill would be V = $1024 (in millions). The company can invest in many separate identical labs. Each lab costs..

Assume that the inverse market demand function : Let us examine the market for smart phones. Assume that the inverse market demand function is given by p = 240-2Q. Initially, firm A and firm B produce at equal unit cost, c0. After investing heavily in R&D, firm A has managed to reduce its unit prod..

Assume firms compete over quantity : (Assume firms compete over quantity) Two identical firms are serving a market in which the inverse demand function is given by P = 4002Q (P = 4002(q1 +q2)). The marginal costs of each firm are $40 per unit. show and explain, how the Cournot quantitie..

Case studies which are based on realistic business problems : Two small case studies which are based on realistic business problems or situations. Each case study should end with a realistic writing task depending on own conclusions and suggestions.

User Account

All Pages