The marginal product of labor (measured in units of output) for Expando Corp. is given by MPN = A (400 - N) where A measures productivity and N is the number of labor hours used in production. Suppose the price of output is $3 per unit and A = 2.0. What will be the demand for labor if the nominal wage is $18? 107 197 57 397

397 hours

Explanation:

The computation of demand of labor is given below:-

The full form of MPL is Marginal revenue product of labor which equals to

= Marginal revenue * Marginal product labor

Given that

MPN = A * (400 - N)

So,

Marginal product labor = 3*A * (400-N)

Marginal product labor = $18

So,

3*A * (400-N) = $18

3*2 * (400-L) = $18

N = 400-3

= 397 hours

So, the number of labor will be demanded 397 hours