Class Exercise: Chapter 11 W Table 1: Input Table for Output and Marginal Physic
ID: 1112372 • Letter: C
Question
Class Exercise: Chapter 11 W Table 1: Input Table for Output and Marginal Physical Product age Rates in Competitive Labor Markets Output Marginal Physical 17 31 53 65 Calculate this firm's Marginal Physical Product in Table 1 Part 1) Assume that this firm is operating in perfectly com ket and The market price for its product is $6.00 and it can hire as much labor as it wants at $42 per day (that is, the daily wage $42.). Calculate (using dollars and cents) TR, MR,MRP, TLC AND MLC for this firm . Wor TR MR Price kers Output MPP MLC ao/al Product price)oMarginal MRP Revenue Revenue M MPL Wager Part 2) How many workers will this firm hire? (What is this profit maximizing amount of labor?) Answer:- workersExplanation / Answer
Marginal Physical Product (MPP) may be given in the following table.
Market Price of the Product = $6
Wage rate = $42
Price
of Product
MR
($)
MRPl
MRxMPP
($)
TLC
WxL
MLC
d(TLC)/dL
Part 2
From the above table we find that MR is equal to MLC for labor unit 5. Therefore hiring of 5 labor will be most profitable to the firm.
Workers (L) Output(O) Marginal Physical Product (MPPL ) 0 0 0 1 17 17 2 31 14 3 43 12 4 53 10 5 60 07 6 65 05