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3 November, 05:05

Profit-maximizing firm Crunchy Chips, Inc. sets out to hire 8 workers in the imperfectly competitive snack market. Given that Crunchy Chips, Inc. is a profit-maxizing firm operating in an imperfectly competitive market, what is the market wage rate they will pay each worker? #

Col1 Workers (L) 2 4 6 8

Col2 MPL 8 6 4 2

Col3 Marginal Revenue $12 $9 $6 $3

Col4 MRPL $96 $54 $24 $6

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  1. 3 November, 05:42
    0
    The market wage rate w = $6

    Explanation:

    As it is a profit maximizing firm, it will hire where (consider the following formula and calculations)

    Step 1.

    MPL = W/P

    Step 2.

    At 8 worker, MPL = 2, P (MR) = 3

    so,

    Step 3.

    2 = w/3

    Step 4.

    w = $6

    Thus, The market wage rate is $6
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