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Suppose that the firm has a minimum quantity of employment, N*; that is, the firm can...

Suppose that the firm has a minimum quantity of employment, N*; that is, the firm can produce no output unless the labour input is greater than or equal to N*. Otherwise, the firm produces output according to the same production function as specified in this chapter. Given these circumstances, determine the effects of an increase in the real wage on the firm’s choice of labour input. As well, construct the firm’s demand curve for labour.

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