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image (Production Function (Definitions (MP (:small_red_triangle: TP/ …
Production Function
F(X)= (L,K)
Definitions
MP
:small_red_triangle: TP/ :small_red_triangle: L
AP
TP/L
TP
Production
Zones
2
L Only
3
Reduce
1
Both
Dl Competitive
VMP=P*MP
VMP = MRP
MWC=W
Hiring
MRP=MWC
DI Uncompetitive
MRP < MVP
Inelastic
WageBill :arrow_up:
Inelastic W :arrow_up:
Elastic W :arrow_down:
Elasticity Determinants
Q Demand
Labor Cost : Total Cost
Substitutablity
Supply of Inputs
Long Run
Substitution Effect
Output Effect
Determinants
Demand
Productivity
Employers
Resource Price
Complements
Substitutes
