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IV. UNIT IV

IV. UNIT IV. A. PRODUCTION AND THE. DEMAND FOR RESOURCES. 1. Marginal productivity theory. of resource demand. a. Calculation of marginal. revenue product. b. Derivation of purely. competitive seller's demand. for a resource and the. market demand for the. resource.

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IV. UNIT IV

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  1. IV. UNIT IV A. PRODUCTION AND THE DEMAND FOR RESOURCES 1. Marginal productivity theory of resource demand a. Calculation of marginal revenue product b. Derivation of purely competitive seller's demand for a resource and the market demand for the resource c. The resource demand for an imperfectly competitive seller 2. Marg. Productivity Theory/Inc. Dist.

  2. Employer is only seller in product market (Price greater than MR) Employer is a pure competitor in resource market (MRC = Price of Resource Services) All other inputs constant but labor

  3. PRODUCT DEMAND PRICE QUANTITY TR CHANGE Q CHANGE TR MR $29.00 0 0 28.50 285 28.50 10 10 285 13.72 7.00 439 32 22 154 11.15 535 6.00 48 16 96 11 590 59 5.00 10.00 55 610 5 20 64 9.53 4.00 UNITS OF LABOR D FOR LABOR TP MPP MRP PER DAY PER DAY 0 0 PRICE Q 1 10 $285 2 32 154 3 48 96 4 59 55 5 64 20

  4. PRODUCT DEMAND PRICE QUANTITY TR CHANGE Q CHANGE TR MR $29.00 0 0 28.50 285 28.50 10 10 285 13.72 7.00 439 32 22 154 11.15 535 6.00 48 16 96 11 590 59 5.00 10.00 55 610 5 20 64 9.53 4.00 Employer is only seller in product market (Price greater than MR) Employer is a pure competitor in resource market (MRC = Price of Resource Services) All other inputs constant but labor

  5. PRODUCT DEMAND PRICE QUANTITY TR CHANGE Q CHANGE TR MR $29.00 0 0 28.50 285 28.50 10 10 285 13.72 7.00 439 32 22 154 11.15 535 6.00 48 16 96 11 590 59 5.00 10.00 55 610 5 20 64 9.53 4.00 UNITS OF LABOR D FOR LABOR TP MPP MRP PER DAY PER DAY 0 0 PRICE Q 1 10 $285 2 32 154 3 48 96 4 59 55 5 64 20

  6. Employer is only seller in product market (Price greater than MR) Employer is a pure competitor in resource market (MRC = Price of Resource Services) All other inputs constant but labor UNITS OF LABOR D FOR LABOR TP MPP MRP PER DAY PER DAY 0 0 PRICE Q $285 1 10 154 2 32 96 3 48 55 4 59 20 5 64

  7. PRODUCT DEMAND PRICE QUANTITY TR CHANGE Q CHANGE TR MR $29.00 0 0 28.50 285 28.50 10 10 285 13.72 7.00 439 32 22 154 11.15 535 6.00 48 16 96 11 590 59 5.00 10.00 55 610 5 20 64 9.53 4.00 UNITS OF LABOR D FOR LABOR TP MPP MRP PER DAY PER DAY 0 0 PRICE Q 1 10 $285 2 32 154 3 48 96 4 59 55 5 64 20

  8. PRODUCT DEMAND PRICE QUANTITY TR CHANGE Q CHANGE TR MR $29.00 0 0 28.50 285 28.50 10 10 285 13.72 7.00 439 32 22 154 11.15 535 6.00 48 16 96 11 590 59 5.00 10.00 55 610 5 20 64 9.53 4.00 UNITS OF LABOR D FOR LABOR TP MPP MRP PER DAY PER DAY 0 0 PRICE Q 285 10 1 1 10 $285 2 22 154 2 32 154 3 16 96 96 3 48 4 55 11 4 59 55 20 5 5 5 20 64

  9. PRODUCT DEMAND PRICE QUANTITY TR CHANGE Q CHANGE TR MR $29.00 0 0 28.50 285 28.50 10 10 285 13.72 7.00 439 32 22 154 11.15 535 6.00 48 16 96 11 590 59 5.00 10.00 55 610 5 20 64 9.53 4.00 UNITS OF LABOR D FOR LABOR TP MPP MRP PER DAY PER DAY 0 0 PRICE Q 285 10 1 1 10 $285 2 22 154 2 32 154 3 16 96 96 3 48 4 55 11 4 59 55 20 5 5 5 20 64

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