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Tags
#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
Question
For simplicity, we can assume that the only input in a production process is [...]
Answer
labor

Tags
#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
Question
For simplicity, we can assume that the only input in a production process is [...]
Answer
?

Tags
#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
Question
For simplicity, we can assume that the only input in a production process is [...]
Answer
labor
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For simplicity, we can assume that the only input in a production process is labor that must be purchased in the labor market. The price of an hour of labor is the wage rate, or W. Hence, we can say that (for any given level of technology) the willingness to supply a

Original toplevel document

3.3. The Supply Function and the Supply Curve
nomists refer to the “rules” that govern this transformation as the technology of production . Because producers have to purchase inputs in factor markets, the cost of production depends on both the technology and the price of those factors. <span>Clearly, willingness to supply is dependent on not only the price of a producer’s output, but also additionally on the prices (i.e., costs) of the inputs necessary to produce it. For simplicity, we can assume that the only input in a production process is labor that must be purchased in the labor market. The price of an hour of labor is the wage rate, or W. Hence, we can say that (for any given level of technology) the willingness to supply a good depends on the price of that good and the wage rate. This concept is captured in the following equation, which represents an individual seller’s supply function: Equation (7)  Qsx=f(Px,W,…) where Qsx

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