00:01
So here we're talking about labor markets, right? and the first thing we need to do is use the left diagram.
00:05
So i'll replicate that labor, wage, demand, which is, of course, the marginal revenue product of labor, supply, and the equilibrium is at the intersection of these two points.
00:19
And that looks to be at a price of 25 or a wage of 25.
00:24
And we're not given any sort of scale here, but judging from where it is, it looks approximately like 22 .5, assuming it's on the same scale, right? but we're not given any scale here.
00:42
In two, we want to use the non -labor costs.
00:50
Well, to do this, we need to draw the second part, right? for the competitive firm, we have a marginal revenue product.
00:59
And the key here is that the demand carries over, right? it's got to be the same wage.
01:06
If the wage is 25 in the market, the individual firm has got to be paying 25 as well.
01:12
So this means, if you sort of look at where that intersects, to me, that looks like about 20.
01:19
And this area would be the wage costs, which are equal to w times l, right? they're a rectangle.
01:29
They are the amount of workers, right? which is this, and times the wage, which is this...