Matin\'s Magical Milk Farm produces cow rsquo s milk and sels It to a local stor
ID: 1207029 • Letter: M
Question
Matin's Magical Milk Farm produces cow rsquo s milk and sels It to a local store for $2.20 per gallon. Agriculture workers in the area are paid a fixed wage rate of $70 per day. Use this information and the Information in the table below to answer the questions that follow. Assume that the milk farm is profit maximizing. What Is the marginal product of labor (MPL) for employing a Third worker? What is the value of tire marginal product of labor (VMPl) for employing a sixth worker? How many employees should Martin raquo s farm employ? How many employees should Martin rsquo s farm employ of the priee he received per gallon of milk rose to $2.50?Explanation / Answer
MPL for third worker = 50
VMPL for sixth worker = 11
Martin should employee till VMPL>wage(i.e. 70)
So Martin should emplyee 3 workers
If P=$2.5 then Martins should employee 4 workers (as shown in table)
No of Workers Q/day MPL VMPL when P=2.20 VMPL when P=2.50 0 0 1 80 80 176 200 2 150 70 154 175 3 200 50 110 125 4 230 30 66 75 5 250 20 44 50 6 255 5 11 12.5