Wage Wage (dollars (dollars per per hour) hour) 15 15 Horizontal Sum If Product Price Unchanged 10 10 MRP MRPLI 5 Industry Demand Curve 50 100 120 150 Labor L Labor (a) (worker-hours) ) (worker-hours) The Industry Demand for Labor
The Industry Demand for Labor
The demand curve for labor of a competitive firm,MRPL in (a), takes the product price as given.But as the wage rate falls from $15 to $10 per hour,the product price also falls.Thus the firm's demand curve shifts downward to MRPL2. As a result,the industry curve,shown in (b),is more inelastic than the demand curve that would be obtained if the product price were assumed to be unchanged
The demand curve for labor of a competitive firm, MRPL1 in (a), takes the product price as given. But as the wage rate falls from $15 to $10 per hour, the product price also falls. Thus the firm's demand curve shifts downward to MRPL2. As a result, the industry curve, shown in (b), is more inelastic than the demand curve that would be obtained if the product price were assumed to be unchanged
Price MRPsR MRPLR Quantity of Jet Fuel The Short-and Long-Run Demand for Jet Fuel (with Variable Capital)
The Short- and Long-Run Demand for Jet Fuel (with Variable Capital)
The short-run demand for jet fuel MRPsR is more inelastic than the long-run demand MRPLR. In the short run,airlines cannot reduce fuel consumption much when fuel prices increase. In the long run,however,they can take longer,more fuel-efficient routes and put more fuel-efficient planes into service
The short-run demand for jet fuel MRPSR is more inelastic than the long-run demand MRPLR. In the short run, airlines cannot reduce fuel consumption much when fuel prices increase. In the long run, however, they can take longer, more fuel-efficient routes and put more fuel-efficient planes into service
Price Price (dollars (dollars per per yard) yard) Market Supply of Fabric Supply of Fabric Facing Firm 10 Market Demand 10 ME=AE for Fabric D Demand MRP for Fabric 100 Yards of 50 Yards of Fabric Fabric (a) () A Firm's Input Supply in a Competitive Factor Market
A Firm’s Input Supply in a Competitive Factor Market