Search results
Results from the WOW.Com Content Network
The long-run labor demand function of a competitive firm is determined by the following profit maximization problem: ,, = (,), where p is the exogenous selling price of the produced output, Q is the chosen quantity of output to be produced per month, w is the hourly wage rate paid to a worker, L is the number of labor hours hired (the quantity of labor demanded) per month, r is the cost of ...
A conditional factor demand function expresses the conditional factor demand as a function of the output level and the input costs. [1] The conditional portion of this phrase refers to the fact that this function is conditional on a given level of output, so output is one argument of the function.
Wire-grid Cobb–Douglas production surface with isoquants A two-input Cobb–Douglas production function with isoquants. In economics and econometrics, the Cobb–Douglas production function is a particular functional form of the production function, widely used to represent the technological relationship between the amounts of two or more inputs (particularly physical capital and labor) and ...
The equation below (in Cobb–Douglas form) is often used to represent total output (Y) as a function of total-factor productivity (A), capital input (K), labour input (L), and the two inputs' respective shares of output (α and β are the share of contribution for K and L respectively). As usual for equations of this form, an increase in ...
The average product of labor (APL) is the total product of labor divided by the number of units of labor employed, or Q/L. [2] The average product of labor is a common measure of labor productivity. [4] [5] The AP L curve is shaped like an inverted “u”. At low production levels the AP L tends to increase as additional labor is added.
The labor theory of value (LTV) is a ... [10] and market conditions, including supply and demand [11 ... The second form of the equation focuses on the value of ...
Wages paid to labor are denoted by w and the rate of profit or the real interest rate is denoted by r. Note that the assumption of perfect competition enables us to take prices as given. For simplicity we assume unit price (i.e. P =1), and thus quantities also represent values in all equations.
This equation can again be stated as: P = M×(average money wage)/(production labor productivity) + UMC = M×(W/Z) + UMC. Now, assume that both the average price/cost mark-up (M) and UMC are constant. On the other hand, labor productivity grows, as before. Thus, an equation determining the price inflation rate (gP) is: gP = gW − gZ T.