Leadbelly Co. sells pencils in a perfectly competitive product market and hires workers in a perfectly competitive labor market. Assume that the market wage rate for workers is $80 per day. Leadbelly should follow this rule to hire the profit-maximizing amount of labor: Hire workers up to the point where the (marginal product, value of the marginal product, or output price) is (less than, greater than, or equal to) $80 per day. Use the green line (triangle symbol) to graph the new labor-supply curve faced by Leadbelly Co.Wage160 Demand1441281129680644832160Leadbelly Co.Quantity of LaborSThis change causes the marginal product of labor at Leadbelly todecreaseincreaseN²₂(? At the profit-maximizing level of output, the marginal product of the last worker hired is 20 boxes of pencils per day.The price of a box of pencils is $The following graphs show the labor market for pencil workers and the labor supply and demand for Leadbelly Co. Suppose some workers in the paperindustry switch to jobs in the pencil industry.Show how this change affects the pencil market by shifting the labor-demand curve, labor-supply curve, or both.Wage16014412811296644832160→Pencil MarketQuantity of LaborSupplyDemandDemandSupply?

A market with perfect competition has a large number of sellers and purchasers. Sellers' products…

Answered: Leadbelly Co. sells pencils in a…

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: The Markets For The Factor Of Production

Section: Chapter Questions

Problem 7PA

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Leadbelly Co. sells pencils in a perfectly competitive product market and hires workers in a perfectly competitive labor market. Assume that the market wage rate for workers is $80 per day. Leadbelly should follow this rule to hire the profit-maximizing amount of labor: Hire workers up to the point where the (marginal product, value of the marginal product, or output price) is (less than, greater than, or equal to) $80 per day.

Use the green line (triangle symbol) to graph the new labor-supply curve faced by Leadbelly Co.
Wage
160 Demand
144
128
112
96
80
64
48
32
16
0
Leadbelly Co.
Quantity of Labor
S
This change causes the marginal product of labor at Leadbelly to
decrease
increase
N²₂
(?

At the profit-maximizing level of output, the marginal product of the last worker hired is 20 boxes of pencils per day.
The price of a box of pencils is $
The following graphs show the labor market for pencil workers and the labor supply and demand for Leadbelly Co. Suppose some workers in the paper
industry switch to jobs in the pencil industry.
Show how this change affects the pencil market by shifting the labor-demand curve, labor-supply curve, or both.
Wage
160
144
128
112
96
64
48
32
16
0
→
Pencil Market
Quantity of Labor
Supply
Demand
Demand
Supply
?

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