1. Use the following total-product schedule as a resource to answer questions a, b, and c. Assume that the quantities of other resources the firm employs remain constant.
Units of resource
Total product
0
0
1
15
2
28
3
38
4
43
5
46
a. If the firm
1. Use the following total-product schedule as a resource to answer questions a, b, and c. Assume that the quantities of other resources the firm employs remain constant.
| Units of resource | Total product |
| 0 | 0 |
| 1 | 15 |
| 2 | 28 |
| 3 | 38 |
| 4 | 43 |
| 5 | 46 |
a. If the firm
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Assume that the firm only uses labor as a resource in production and is hiring workers in a purely competitive labor market. In other words, the firm can hire as many workers as it wishes without affecting the equilibrium wage rate.
|
Units of Labor (L) |
Total Product (Q) |
Product Price (P) |
Total Revenue (TR) |
Marginal Revenue Product (MRP) |
|
0 |
0 |
$2.20 |
$0 |
--- |
|
1 |
15 |
$2.00 |
$30 |
$30 |
|
2 |
28 |
$1.80 |
Ā | Ā |
|
3 |
39 |
$1.60 |
Ā | Ā |
|
4 |
48 |
$1.40 |
Ā | Ā |
|
5 |
55 |
$1.20 |
Ā | Ā |
|
6 |
60 |
$1.10 |
Ā | Ā |
a.Ā Is the firmĀ sellingĀ its product in a purely competitive market or an imperfectly competitive market?
b. Fill out both the TR and MRP columns with the correct values.
c. Suppose the wage rate is $11.00 per worker. How many workers should be employed, in order to maximize profits?
d.Ā If the firm hires the optimum number of workers, what is its total profit?
