Labor demand for wheat production and the market wage rate

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A country produces two crops– paddy and wheat. Given the price of paddy(Pp) and wheat(Pw), the relationship of labor allocation is shown as MPLpXPp = MPLwXPw = w, where MPLp and MPLw are marginal products of labor for the two. If wheat’s price increases by 10% with no changes in paddy prices, what will happen to labor demand for wheat production, and the market wage rate?

Reference no: EM131092307

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