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QUESTION
Suppose a firm has a marginal product schedule given by the equation MPL = 50 2L, where L is the number of workers. Suppose the money wage is $40 and...
Suppose a firm has a marginal product schedule given by the equation
MPL = 50 − 2L,
where L is the number of workers. Suppose the money wage is $40 and the product price is $2.
a. Find the optimal employment level assuming no training investment.
b. If the price of the product the firm sells falls to $1, find the new employment level.
