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United States (323,678)
Economics (275)
ECON 305 (10)
Dr.Neri (9)
Lecture

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Department
Economics
Course
ECON 305
Professor
Dr.Neri
Semester
Spring

Description
2-6 chapter 3 Labor Supply long term is a vertical line Each firm hires labor up to the point where MPL= W/P Same logic shows MPK= R/P  diminishing returns to capital: MPK  as K   The MPK curve is the firm’s demand curve for renting capital.  Firms maximize profits by choosing K such that MPK = R/P. α −α (1−α)Y α−1 1−α αY MPL = (1−α)AK L = L MPK = α AK L = K Neocl
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