Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Northern Lumber operates a large lumber-processing mill in a small town in Washington State. It is one of the larger lumber producers in the region and has some market power in the sale of that product. A recent consulting study has indicated that the price elasticity of demand for the firm's product is about -3.0. Also, Northern is the dominant employer in the local labor market, and effectively can be considered as a monopsonist in the purchase of labor. The firm's labor demand (i.e. marginal revenue product) function is; MRP = 1 000 - 2Lwhere L is the number of workers. Because of its size relative to the labor supply in the area, Northern faces an upward sloping labor supply function, w = 50 + 0.025L and ME = 50 + 0.050Lwhere w is the daily wage rate and ME is the marginal expenditure on labor.
Once the firm determines the optimal rate of labor input and the wage rate, the rate of output is determined. The firm uses a cost-plus pricing formula that includes the price elasticity of demand as a determinant in setting product price. The same study indicated that average cost is about RM300 per unit (1 000 board feet) of lumber.
Requirements
1. Determine the amount of labor that the firm should employ in order to maximize profit.
2. Determine the wage rate the firm will have to pay.
3. What price will the firm charge per unit of output?
SEARCH THEORIES - A BRIEF' HISTORICAL OVERVIEW A search theory of unemployment is found even in the writings of A. C. Pigou in the inter-war period. To explain the high
CONCEPT AND PHASES OF TRADE CYCLE Broadly speaking, the trade or business cycles are those fluctuations which recur in economic activity with a certain degree of regularity fo
POPULATION SIZE AND DEMOGRAPHIC TRENDS a. Changes in Population The people of a country are its consumers. They provide the labour force for production. A study of
“Managerial economics involves use of economic analysis to make business decisions involving the best use of a firm’s scarce resources” Explain the statement with suitable example.
The only road connecting two populated islands is currently a freeway. During rush hour, there is congestion because of the heavy traffic. The marginal external cost from congestio
Q. Show the Fixed Proportion Production Function? A fixed proportion production function is one in that technology needs a fixed combination of inputs, say labour and capital,
Calculate point elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2
Q. Proportion of Market Supplied - Determinants of Demand? Price elasticity of market demand moreover relies on the proportion of market supplied at the determined price. If le
examine the endogenous and exogenous determinants of money supply
Market Structures This refers to the nature and degree of competition within a particular market. Capitalist economies are characterised by a large range of different market
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd