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Suppose That Firm Profitability Depends Inversely on the Wage Rate

Question 43

Essay

Suppose that firm profitability depends inversely on the wage rate and directly on the level of workplace disamenity X.Consider two firms that differ in their ability to reduce the level of workplace disamenity X.With the wage rate on the vertical axis and X on the horizontal axis,draw a graph of the offer curve.Explain the basis of the offer curve that you've sketched.

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The student should draw a graph like Fig...

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