Questions Are Based on the Data in the Following

Questions are based on the data in the following table. Assume that the labor market is perfectly competitive.




$\begin{array}{cc}\begin{array}{cc}\text { Labor } & \text { Output } \\\hline0& 0 \\1 & 15 \\2 & 29 \\3 & 42 \\4 & 54 \\5 & 65 \\6 & 75\end{array}\begin{array}{c}\text { Price }\left(D_{1}\right) \\\hline\$ 10.00 \\10.00 \\10.00 \\10.00 \\10.00 \\10.00 \\10.00 \\\end{array}\begin{array}{c}\text { Price }\left(\mathrm{D}_{2}\right) \\\hline \$ 10.00 \\9.50 \\9.00 \\8.50 \\7.50 \\6.50 \\5.50\end{array}\end{array}$
-Compared to a firm facing D₁,a firm facing demand schedule D₂ but paying the same wage will hire:

A) the same number of workers,since total product is the same in both instances
B) fewer workers,since product price declines as output increases
C) more workers,since product price declines as output increases
D) more information is required

Correct Answer:

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