How has this event affected the prosperity of the firm

Reference no: EM131103910

Suppose there is an increase in the demand for lumber, which raises the price of lumber.

a. Show the impact of the increase in the price of lumber on the market for lumberjacks in Exhibit 1.

b. What did the increase in the price of lumber do to the value of the marginal product of lumberjacks and the wage of lumberjacks? Explain.

c. What will happen to the value of the marginal product and the rental rate for timberland and for capital that is used for cutting and shipping timber? Explain.

d. How has this event affected the prosperity of the firm and the owners of the factors of production employed by the firm? Explain.

Reference no: EM131103910

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