Chapter 15Slide 2Slide 3Slide 4Slide 5Slide 6Slide 7Slide 8Slide 9Slide 10Slide 11Slide 12Slide 13Slide 14Slide 15Slide 16Slide 17Jeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFactor Markets and Vertical IntegrationChapter 15Jeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedTable 15.01 Marginal Product of Labor, Marginal Revenue Product of Labor, and Marginal CostJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights Reserved Figure 15.01a The Relationship Between Labor Market and Output Market Equilibriaw, VMPL,$ per unitLabor supplycurveMRPL, Labordemand curveL, Workers per hour620 3 4 5(a) Labor Profit-Maximizing Condition6w = 1291815Jeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights Reserved Figure 15.01b The Relationship Between Labor Market and Output Market EquilibriaMC , p ,$ per unitMCp27130 18 22 25232.464q, Units of output per hour(b) Output Profit-Maximizing ConditionJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 15.02 Shift of and Movement Along the Labor Demand Curvew, VMPL,$ per unit542 6D2 = $2 MPLD1 = $3 MPLL, Workers per hour08w1 = 12w2 = 6S1S2abcJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 15.03 Labor Demand of a Thread Millw, MRPL,$ per hour8832 162Short-run demand ( K = 108)Long-rundemandL, Workers per hour01510abcShort-run demand (K = 32)Jeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 15.04a Market Demand for Laborw, $ per hour25L, Firm’s labor per hour70 9050100abc(a) FirmMRPL(p = $7)MRPL(p = $9)Jeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 15.04b Market Demand for Laborw, $ per hour25L, Market’s labor per hour700 900500D(price varies)D(p = $9)D(p = $7)10ABC(b) Market0Jeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 15.05 Demand for Microchips in Calculatorsp, pm, $ per unitQ, Calculators per dayM, Microchips per dayDemand forcalculatorsDemand formicrochipsppJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 15.06 How Labor Demand Varies with Market Structurew, Wage per hourL, Workers per hourCompetitive demandDuopoly demandMonopoly demandJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 15.07 Effects of Output Market Structure on Labor Market Equilibriump, w, $ per unit0 30 80604020Q, Units per hourQ2 = L2Q3 = L3Q1 = L1L, Workers per hourMonopoly labordemand, MR = $900Competitive labor demand,Output demandSupply of labor80p3 = p2 = w3 = 50p1 = w2 = w1 = 20e3e2e1Jeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 15.08 Double Monopoly Markupp, w, $ per unit150 30 804020Q, Units per hourQ4 = L4Q3 = L3L, Workers per hourOutput demandC = $450A = $225B = $450Labor demand, MRQMC of labor8020p3 = w4 = w3 = 50p4 = 65e3e4MRLJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 15.09a Monopsonyw, $ per workerDemandSupplyL, Workers per day6020 30(a) Less ElasticME, Marginal expenditurewm = 2020wc = 30ecemME = 40600Jeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 15.09b Monopsonyw, $ per workerDemandSupplyL, Workers per day60200(b) More ElasticME, Marginal expenditure2010wm = 30emME = 4060Jeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 15.10 Welfare Effects of Monopsonyp, $ per unitQmQcQ, Units per daypmpcDemandSupplyMarginal expenditureABD FECMEJeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedSolved Problem 15.3 w, Wageper hourL1L2L, Workers per hourw1w2DemandSupplyMinimum wagee2e1ME1ME2ME2Jeffrey M. Perloff, Microeconomics, © 2001 Addison Wesley Longman, Inc., All Rights ReservedFigure 15.11 Vertical OrganizationFinal goodq = f (M,
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