Part 1 (4 points) See Hint As manager of a local ice cream shop, you must determ

Question

Part 1 (4 points) See Hint As manager of a local ice cream shop, you must determine how many workers to hire to serve ice cream at this Saturday's big parade. Each cup of ice cream can be sold for $4. The table below shows each worker's marginal product (MP) and the value of their marginal product (VMP). Compute the values of the missing entries Quantit of ice Quantity of labor (workers) Value of Marginal Marginal Product Product (cups) 0 110 200 270 300 320 330 0 110 $440 90 $ 2 3 4 30 $120 20 $80 $40 Part 2 (2 points) (a) Based on the marginal product of the workers, the ice cream shop experiences . see Hint (b) If workers earn $150 for each shift that they work, the optimal number of workers to hire is .

Explanation / Answer

Part A

Part B

a. Based on the marginal product of the workers the ice-cream shop experiences $1320.

b. If the workers earn $150 for each shift that they work, the optimal number of workers to hire is 3.

Quantity of Labour Quantity of Ice- Cream Marginal Product Value of Marginal Product 0 0 - - 1 110 110 $440 2 200 90 $360 3 270 70 $280 4 300 30 $120 5 320 20 $80 6 330 10 $40

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---