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Unformatted text preview: to accept for its products. Most firms will sell products up to the point where their profits are 0, or where the amount they spend to make and sell the product is equal to the amount they receive for the product on the market. To find the reservation wage on James's supply curve, find the point where his quantity supplied will be 0. The reservation price will be marginally higher than the price at Q = 0. If we assume that James can only tutor in hourly increments (that is, he can't tutor for less than an hour), then his reservation wage will be the wage at which he will only tutor for one hour. On the graph, it looks like James's reservation wage will be about $10/hour....
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- Fall '08