Eco

 What are the equilibrium wage rate and employment level? What is the economic rent?
  

b.     Next assume that the price of a substitute resource increases, other things constant. What happens to demand for labor? What are the new equilibrium wage rate and employment level? What happens to economic rent? 

c.     Suppose instead that demand for the final product drops, other things constant. Using labor demand curve D1, as your starting point, what happens to the demand for labor? What are the new equilibrium wage rent and employment level? Does the amount of economic rent changes? 

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