228
MACROECONOMICS
NOTES
1
.
Maximizing Eq. (7.2) we obtain
/
N
=
p
(
F
/
N
)
-
w
=
0
or
p
(
F
/
N
)
=
p
MP
N
=
w.
2
.
In the long run, the firm chooses both how many workers
to hire and how much plant and equipment to invest
in. If the two factors are co-operative in the sense that
increasing one factor raises the marginal productivity
of the other factor:
F
NK
=
F
KN
0, the long-run demand
curve for labour will be more elastic than the short-run
demand curve.
3.
Firms and workers are connected in two different ways—
through the goods market and through the labour market.
Hence, behaviour ...
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