What wage will the firm pay, Managerial Economics

A firm faces a perfectly elastic demand for its output at a price of $6 per unit of output. The firm, Though, faces an upward-sloped labor supply curve of
         E= 20w-120

Where E is the number of workers hired every hour and w is the hourly wage rate, Therefore, the firm faces an upward-sloped marginal cost of labor curve of

MCe= 6 + -0.1E

Every hour of labor produces five units of output. How many workers should the firm hire every hour to maximize profits? What wage will the firm pay? What are the firm's hourly profits?

Posted Date: 3/14/2013 7:26:23 AM | Location : United States

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