(Solved): 1. [Labor Markets - The Labor Supply and Demand Model] The following table shows the relationship be ...

1. [Labor Markets - The Labor Supply and Demand Model] The following table shows the
relationship between the number of workers and production in John’s mask factory.

(a) Complete the remaining columns of the table.

(b) How many workers will John’s mask factory hire if the market wage is $800? Explain in one
sentence why this is the factory’s optimal choice.

(c) Consider a producer that is a price-taker with the same labor productivity, that is, with the
same relationship between the number of workers and weekly production as above. Without
doing any more calculations, will labor demand be different for the price-taker firm and why?
Briefly explain.
 

 

\begin{tabular}{|c|c|c|c|c|c|} \hline Number of Workers & Weekly Production & Marginal Product & Price \( (\$) \) & Total Revenue \( (\$) \) & Marginal Revenue Product \( (\$) \) \\ \hline 1 & 120 & & 11 & & \\ \hline 2 & 200 & & 10 & & \\ \hline 3 & 260 & & 9 & & \\ \hline 4 & 300 & & 8 & & \\ \hline 5 & 320 & & 7 & & \\ \hline \end{tabular}