A worker-managed firm is a firm managed by elected representatives of its employees. Such firms are believed to maximize profits per worker rather…

A worker-managed firm is a firm managed by elected representatives of its employees. Such firms are believed to maximize profits per worker rather than total profits, as described in the text, pp. 196-200. Consider such a firm in the short run, when labour is the only variable input. If the firm faces a product price, P, which it cannot alter by changing its output, will it have an upward-sloping product supply curve or will its short-run supply curve be downward-sloping? Will an increase in demand cause P to rise by more, less, or the same as the demand increase? You may assume diminishing returns to labour and constant returns to scale in production.”