Use the figure below to answer the following questions.

Figure 18.3.1
-Refer to Figure 18.3.1. This figure shows the value of marginal product of labour curve, the labour supply curve, and the marginal cost of labour curve. If this labour market is competitive, the quantity of labour employed is

Question

Use the figure below to answer the following questions.
  
Figure 18.3.1
-Refer to Figure 18.3.1. This figure shows the value of marginal product of labour curve, the labour supply curve, and the marginal cost of labour curve. If this labour market is competitive, the quantity of labour employed is

Quizplus · Accepted Answer

In a competitive labour market, the equilibrium occurs where the market wage rate equals the marginal cost of labour and the quantity of labour supplied equals the quantity of labour demanded. According to the figure, this occurs at point E where the marginal cost of labour curve intersects with the value of the marginal product of labour curve. At this point, the quantity of labour employed is 75 hours. Therefore, the correct answer is (C).

Use the Figure Below to Answer the Following Questions