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Consider the firms short run decision to hire workers. Suppose that a firm produces goods for sale in the perfectly competitive market. labor markets are competitive as well. Suppose the production function is Q=40L-3L(squared). One unit of a good is sold for $2
a) why does capital not appear in the production function?
b) derive the short-run labor demand curve. (simply plug numbers in to approximate)
c) assuming the wage rate is $25/hour, how many workers will this firm hire in the short run?
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