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Unformatted text preview: curve is perfectly flexible. It is represented by the horizontal straight line WS (AW = MW) curve. The rate of wages as a price of labor is equal to both the average wage and the marginal wage per worker. The demand and supply curves intersect at the point of equilibrium e . At this point a firm employs N = 4 workers and pays W = $20 as wages. This is a profitable situation for the firm....
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- Fall '10