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The marginal product of labor (measured in units of output) for Expando Corp. is given by MPN = A(400 - N) where A measures productivity and N is the number of labor hours used in production. Suppose the price of output is $3 per unit and A = 2.0. What will be the demand for labor if the nominal wage is $18? 107 197 57 397

Respuesta :

Answer:

397 hours

Explanation:

The computation of demand of labor is given below:-

The full form of MPL is Marginal revenue product of labor which equals to

= Marginal revenue × Marginal product labor

Given that

MPN = A × (400 - N)

So,

Marginal product labor = 3×A×(400-N)

Marginal product labor = $18

So,

3×A×(400-N) = $18

3×2×(400-L) = $18

N = 400-3

= 397 hours

So, the number of labor will be demanded 397 hours

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