Microeconomics: The Resource Market

Question

A firm can sell all the units of a product it wants at a price of $4 each, and it can hire all the workers at wants for a wage of $15.

In what type of market does the firm sell its product? How do you know?

In what type of labor market does the firm hire its workers? How do you know?

Answer 1

The firm is a PRICE TAKER in both the product market (the choice of Q doesn't affect price) and in the labor market as the number of workers they hire does not impact the prevailing wage.

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