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The Following Expressions Describe a Perfectly Competitive Labor Market

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Essay

The following expressions describe a perfectly competitive labor market. The labor supply curve is:
SL = AE = $3.00 + $0.000375L.
The marginal revenue product of labor curve is:
MRPL = $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.


Definitions:

SWOT Analysis

An instrument for planning strategies that detects the Strengths, Weaknesses, Opportunities, and Threats involved in business competition or the planning of a project.

External Analysis

The process of evaluating an organization's external environment to identify opportunities and threats that could impact its strategy and operations.

Environmental Scanning

The process businesses use to understand the external factors influencing their operation, including technological, regulatory, and competitive elements.

Internal Factors

Elements or conditions within an organization or individual's control that can influence decisions, behaviors, and outcomes, such as policies, resources, and personal abilities.

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