Chuckle\'s Pizza Place products gourmet pizzas that sell for $20 each. Assume th
ID: 1207268 • Letter: C
Question
Chuckle's Pizza Place products gourmet pizzas that sell for $20 each. Assume that labor is the only varies for the firm. If Chuckle hires 10 workers, he can produce and sell 600 pizzas per week. If he hires 11 workers, he can produce and sell 650 pizzas per week. Chuckle pays each of his workers $400 per week. When of the following is correct? If the firm employing 11 workers, then the profit would increases if it cut back to 10 workers. For the 11th worker, the market product is $1,000. For the 11thy worker, the profit is $1,000. The firm is maximizing its profit.Explanation / Answer
Answer is B, the marginal revenue from the 11th worker is 1000 (TR 13000 - TR 12000)
TR is Price X Quantity
so for the 10th worker TR is 20 X 600 = 12000
11th worker TR is 20 X 650 = 13000
Thus MR is the difference between TR of the 11th worker and the 10th worker.
MR = TRn - TRn-1
Another closer answer is D, But with the given information we cannot decide the firm is profit maximizing or not.
And so THE ANSWER IS B