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Suppose That the Marginal Revenue Product Function for the Firm

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Suppose that the marginal revenue product function for the firm is MRPL = 40 - .75L.Assume that the firm hires labor in a competitive labor market at a wage of W = $10 per hour.Explain why employment of L = 20 is not profit maximizing (show exactly how profit could be increased).What is the profit maximizing level of employment for this firm?


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