The Factor (Resource) Market Worksheet - Unit V Page 3
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10FIRM in a Perfectly Competitive Labor Market
$60+
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0
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Quantity of Workers
Shifting Demand
11. MRP depends on two variables. Marginal Product and the price of the product being produced. For
each of the following, identify whether MP or Price changes and indicate if the demand (MRP)
increase or decreases.
Situation
Marg. Product
Price
Demand/MRP
The price of electricity falls
Stronger workers increases push-up output significantly
Consumers prefer energy generated by wind
New and improved machines increase the amount of
electricity each push-up generates
During the hot summer, consumer use more electricity
12. Assume the demand increases for electricity produced by this firm and now each push-up can
generate $2 worth of energy. How many workers should this firm hire? Explain
13. Draw an industry and firm in a perfectly competitive labor market:
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