Question

With a decrease in the price of labor the imperfectly competitive producer is likely to hire ________ labor than a competitive firm because the price of a product drops with increases in output.

Answer 1

less

Step-by-step explanation:

In an imperfect competitive market there are heterogeneous, that is dissimilar products in the market.

So when the producer comes to know that the price of labor is decreased, that is cost of production is decreased, the, since there is no perfect competition the price of the product would also decrease and there will not be any extra benefit. Thus, the producer would be willing to have less labor engaged.