MonopolisticCompetition幻灯片.ppt

The Value of the Marginal Product of Labor... 0 Quantity of Apple Pickers 0 Value of the Marginal Product Value of marginal product (demand curve for labor) Market wage Profit-maximizing quantity The Labor Supply Curve Supply Wage (price of labor) Quantity of Labor 0 Equilibrium in the Labor Market... Equilibrium employment, L Supply Wage (price of labor) Quantity of Labor 0 Demand Equilibrium wage, W A Shift in Labor Supply... Wage (price of labor) W1 0 Quantity of Labor L1 Supply, S1 Demand 2. ...reduces the wage... 3. ...and raises employment. 1. An increase in labor supply... S2 W2 L2 A Shift in Labor Demand... Wage (price of labor) W1 0 Quantity of Labor L1 Supply Demand, D1 2. ...increases the wage... 3. ...and increases employment. 1. An increase in labor demand... D2 W2 L2 The Markets for Land and Capital... Quantity of Land Quantity of Capital Q Q P P 0 0 Rental Price of Land Rental Price of Capital Demand Demand Supply Supply (a) The Market for Land (b) The Market for Capital The Value of the Marginal Product and the Demand for Labor The value-of-marginal-product curve is the labor demand curve for a competitive, profit-maximizing firm. The Value of the Marginal Product of Labor... 0 Quantity of Apple Pickers 0 Value of the Marginal Product Value of marginal product (demand curve for labor) Market wage Profit-maximizing quantity Input Demand and Output Supply When a competitive firm hires labor up to the point at which the value of the marginal product equals the wage, it also produces up to the point at which the price equals the marginal cost. What Causes the Labor Demand Curve to Shift? Output Price Technological Change Supply of Other factors The Labor Supply Curve The labor supply curve reflects how workers’ decisions about the labor-leisure tradeoff respond to changes in opportunity cost. An upward-sloping labor supply curve means that an increase in the wages induces workers to increase the quantity of labor they supply. The Labor Supply Cur