1 the nation of ectenia has 20 competitive apple orchards...

The nation of Ectenia has 20 competitive apple orchards, which sell apples at the world price of $2. The following equations describe the production function and the marginal product of labor in each orchard: Q = 100L - L^2 MPL = 100 - 2L, where Q is the number of apples produced in a day, L is the number of workers, and MPL is the marginal product of labor. a. What is each orchard's labor demand as a function of the daily wage W? What is the market's labor demand? b. Ectenia has 200 workers who supply their labor inelastically. Solve for the wage W. How many workers does each orchard hire? How much profit does each orchard owner make?

Transcript

00:01 Hello, in this video i will be explaining the following.

00:03 So our first question here is what is each orchid's labor demand as a function of daily wage and what is the market's labor demand? so i'm right to do that.

00:14 We're first going to use our marginal product of labor and the wages, which is w, is equal to v, p, m, f.

00:28 So from here we know that our p is going to to be time m p i and then that can be changed into two one hundred minus two l which is equal to two hundred minus four l so now let's rewrite the wages function to obtain the individual labor curve which is w equals 200 minus four l and l is equal to 50 minus 0 .25w.

01:16 So the market demand labor curve is equal to l equals 1 ,000 minus 5w.

01:37 If you do, skip the step.

01:40 I apologize.

01:42 If you take that l and do 20 times 50 minus 0 .25.

01:51 That gives you 1000 minus 5 w, which is the market demand labor curve.

02:08 So we're going to use that to find the market wages.

02:14 So that's going to be w is equal to 200 minus 0 .2l.

02:26 So that's how you would answer the first part, the first and the second part of the question.

02:39 So this would be in the wages and this would be the market to labor demand.

02:53 This would be the demand curve.

03:02 So either one could be, depending on how you want to set that up.

03:08 So next we have 200 workers who supply labor and inelastically solve for w.

03:13 How many workers does each court get higher and was the profit for each owner? so first we're going to do the equal premium wages, which is l equals 1 ,000 minus 5 w so that changes into 200 equals 1 ,000 minus 5 w which is 5 w equals 800 which goes to w equals 800 divided by 5 and w equals 160 so since there is 200 workers and 20 orchids the total number of workers is equal to 200 divided by 20, so 10 workers.

04:17 And now we're going to know the profit for each...

Question

Please give Ace some feedback