Business, 17.04.2020 01:09 maxpaz782

The nation of Ectenia has 80 competitive apple orchards, which sell apples at the world price of $2 per apple. The following equations describe the production function and the marginal product of labor in each orchard: Q = 80L−L2 MPL = 80−2L where Q is the number of apples produced in a day, L is the number of workers, and MPL is the marginal product of labor. Now, suppose the price of apples is back at $2 per apple, but a hurricane destroys half the orchards so only 40 orchards remain. Recall that each orchard's labor demand as a function of the daily wage is L=40−0.25W. What is the market's labor demand? L=80−20W L=1,600−10W L=1,600−20W L=40−0.25W Ectenia continues to have 1,200 workers who supply their labor inelastically. The equilibrium wage is now $ per worker per day. Each orchard hires workers and makes a profit of $ per day. (Note: Assume that wages are the firm’s only costs.) Total income in the country (defined as workers' income plus orchards' profit) was equal to $156,000 before the crop destruction. True or False: Total income of Ectenia rose as a result of the crop destruction. True False

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The nation of Ectenia has 80 competitive apple orchards, which sell apples at the world price of $2...

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