The following expressions describe a perfectly competitive labor market. The labor supply curve is:
S_L = AE = $3.00 + $0.000375L.
The marginal revenue product of labor curve is:
MRP_L = $13.00 - 0.000433L.
a. Find the equilibrium wage in this labor market. Also, find the optimal number of labor hours worked per week. Let L represent the number of labor hours worked per week, and let W represent the hourly wage of workers.
b. Determine the economic rent earned by labor in this situation.

Question

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The Answer of The following expressions describe a perfectly competitive labor market. The labor supply curve is: S_L = AE = $3.00 + $0.000375L. The marginal revenue product of labor curve is: MRP_L = $13.00 - 0.000433L. a. Find the equilibrium wage in this labor market. Also, find the optimal number of labor hours worked per week. Let L represent the number of labor hours worked per week, and let W represent the hourly wage of workers. b. Determine the economic rent earned by labor in this situation.

The Following Expressions Describe a Perfectly Competitive Labor Market