Home » (15%). A worker-managed firm is a firm managed by elected representatives of its employees.

(15%). A worker-managed firm is a firm managed by elected representatives of its employees.

2. (15%). A worker-managed firm is a firm managed by elected representatives of its employees. Such firms are believed to maximize profits per worker rather than total profits, as described in the text, pp. 196-200. Consider such a firm in the short run, when labour is the only variable input. If the firm faces a product price, P, which it cannot alter by changing its output, will it have an upward-sloping product supply curve or will its short-run supply curve be downward-sloping? Will an increase in demand cause P to rise by more, less, or the same as the demand increase? You may assume diminishing returns to labour and constant returns to scale in production. (Hint: Don’t panic! This is straightforward. Suppose this firm produces an output, Q, with labour, L, and capital, K. In the short run, K is fixed, as are capital costs, F. If MPL is labour’s marginal physical product, the profit-per-worker maximum is where P(MPL) = (PQ – F)/L as at A in Fig. 6.1, p. 197 of the text. Now re-arrange this equality so that F/P is alone on one side of the equation. It can be shown that constant returns to scale implies Q = (MPL)L + (MPK)K, while diminishing returns to labour then implies that an increase in L raises the marginal physical product of capital, MPK.) 

Show more







Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10