Question: Wanda's is a fish store that hires students to pack the fish. Students can pack the following amounts of fish:
The fish market is competitive and the price of fish is 50¢ a kilogram. The market for packers is competitive and their market wage rate is $7.50 an hour.
The market price of fish falls to 33.33¢ a kilogram, but the packers' wage rate remains at $7.50 an hour.
At Wanda's fish store, packers' wages increase to $10 an hour, but the price of fish remains at 50¢ a kilogram.
a. What happens to the value of marginal product of labour?
b. What happens to Wanda's demand for labour curve?
c. How many students does Wanda's employ?