Microeconomics,, 16th Canadian Edition

production, of course. Physical capital and land are also important. Why does a hectare of farmland in Northern Saskatchewan ren ...

13.1 The Demand for Factors Firms require the services of land, labour, and capital to be used as inputs. Firms also use as inpu ...

until the last unit of that factor adds as much to revenue as it does to costs. Profit-maximizing firms will hire units of a var ...

This condition applies to any firm and any factor, in any market structure. In the special case of competitive goods and factor ...

To maximize its profits, any firm must hire each factor of production to the point where the factor’s marginal revenue product j ...

Figure 13-1 From Marginal Product to Demand Curve The Firm’s Demand Curve for a Factor Now that we have determined the firm’s pr ...

The law of diminishing marginal returns implies that firms have a negatively sloped demand curve for factors of production. In p ...

Equation 13-2 states that a profit-maximizing competitive firm will employ additional units of the factor up to the point at whi ...

Study Exercises 13 and 14 at the end of this chapter to work through an example of a firm hiring workers in a factory that makes ...

As we saw in Chapter 8 , when the price of one factor rises, a profit- maximizing firm will substitute away from the factor whos ...

The Market Demand Curve for a Factor We saw in Chapter 6 that the market demand curve for any good or service is simply the hori ...

marginal product of factors of production, and thus lead to a rightward shift of the MP curve. For labour, for example, one kind ...

13-1 , if the product price rises from $5 to $10, the MRP curve shifts to the right (even though the MP curve does not move). Fo ...

no effect on the market price of furniture. But all furniture-building firms taken together do have an effect on the equilibrium ...

13. 2 The Supply of Factors When we consider the supply of any factor of production, we can consider supply at three different l ...

these levels of aggregation because the amount of factor mobility is different in each case. A given factor of production is oft ...

supply changes slowly. Each year, the stock of capital goods is diminished by the amount that becomes physically or economically ...

The number of people willing to work is called the labour force; the total number of hours they are willing to work is called th ...

Changes in real wages also play a role in determining the labour-force participation rate. A rise in the demand for labour, and ...

Hours per Person The wage rate influences not only the number of people who want to work but also the number of hours that each ...