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1、TheMarketsfortheFactorsofProduction©2015CengageLearning.AllRightsReserved.Maynotbecopied,scanned,orduplicated,inwholeorinpart,exceptforuseaspermittedinalicensedistributedwithacertainproductorserviceorotherwiseonapassword-protectedwebsiteforclassroomuse.1FactorsofProductionFactorsofproducti
2、onInputsusedtoproducegoodsandservicesLaborLandCapitalDemandforafactorofproductionDeriveddemandFromfirm’sdecisiontosupplyagoodinanothermarket©2015CengageLearning.AllRightsReserved.Maynotbecopied,scanned,orduplicated,inwholeorinpart,exceptforuseaspermittedinalicensedistributedwithacertainpro
3、ductorserviceorotherwiseonapassword-protectedwebsiteforclassroomuse.2TheDemandforLaborLabormarketGovernedbysupplyanddemandLabordemandDeriveddemandLaborservices=inputsintotheproductionofothergoods3©2015CengageLearning.AllRightsReserved.Maynotbecopied,scanned,orduplicated,inwholeorinpart,exc
4、eptforuseaspermittedinalicensedistributedwithacertainproductorserviceorotherwiseonapassword-protectedwebsiteforclassroomuse.Figure14©2015CengageLearning.AllRightsReserved.Maynotbecopied,scanned,orduplicated,inwholeorinpart,exceptforuseaspermittedinalicensedistributedwithacertainproductorse
5、rviceorotherwiseonapassword-protectedwebsiteforclassroomuse.TheVersatilityofSupplyandDemandWageofapplepickersPriceofapplesThebasictoolsofsupplyanddemandapplytogoodsandtolaborservices.Panel(a)showshowthesupplyanddemandforapplesdeterminethepriceofapples.Panel(b)showshowthesupplyanddemandfora
6、pplepickersdeterminethewageofapplepickers.Quantityofapples0(a)ThemarketforapplesQuantityofapplepickers0(b)ThemarketforapplepickersSupplyDemandQPSupplyDemandLWTheDemandforLaborAssumptionsforthecompetitivefirmFirmiscompetitiveinbothmarketsForgoodsandforlaborPricetakerPaythemarketwageGetthema
7、rketpriceforgoodsDecideQuantityofgoodstosellQuantityoflabortohireFirmisprofit-maximizing5©2015CengageLearning.AllRightsReserved.Maynotbecopied,scanned,orduplicated,inwholeorinpart,exceptforuseaspermittedinalicensedistributedwithacertainproductorserviceorotherw
