Perfectly competitive product market

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Reference no: EM138903

Q1. What are the advantages and disadvantages of austerity?

Q2. Leadbelly Co. sells pencils in a perfectly competitive product market and hires workers in a perfectly competitive labor market. Assume that the market wage rate for workers is $150 per day.

a. What rule should Leadbelly follow to hire the profit-maximizing amount of labor?

b. At the profit-maximizing level of output, the marginal product of the last worker hired is 30 boxes of pencils per day. Calculate the price of a box of pencils.

Reference no: EM138903

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