Economics 9708 · AS & A Level · Long-run costs and economies of scale

Long-run costs and economies of scale — practice question

In the diagram, MRPL represents a firm’s marginal revenue product of labour curve, S shows its supply of labour curve, and MCL shows its marginal cost of labour curve. If profit maximisation is assumed, how many workers will the firm employ, and what wage will it pay?

  • Anumber employed N1; wage W1
  • Bnumber employed N1; wage W3
  • Cnumber employed N2; wage W2
  • Dnumber employed N2; wage W4

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