. Profit maximization Consider Live Happley Fields, a small player in the strawberry business whose production has no individual effect on wages and prices. Live Happley roduction schedule for strawberries is given in the following table: Labor Output (Number of workers) (Pounds of strawberries) 0 0 1 10 2 19 3 27 4 34 5 40 Suppose that the market wage for strawberry pickers is $118 per worker per day, and the price of strawberries is $16 per pound. On the following graph, use the blue points (circle symbol) to plot Live Happley's labor demand curve when the output price is $16 per pound. Note: Remember to plot each point between the two integers. For example, when the number of workers increases from 0 to 1, the value of the narginal product of for the first worker should be plotted with a horizontal coordinate of 0.5, the value halfway between 0 and 1. Line segments wil utomatically connect the points. ? 200 180 Demand P= $16 160 140 Demand P $12 120 100 80 60 40 20 0 0 2 3 LABOR (Number of workers) at the given wage and price level, Live Happley should hire Suppose that the price of strawberries decreases to $12 per pound, but the wage rate remains at $118. On the previous graph, use the purple points (diamond symbol) to plot Live Happley's labor demand curve when the output price is $12 per pound. WAGE (Dollars per worker)
. Profit maximization Consider Live Happley Fields, a small player in the strawberry business whose production has no individual effect on wages and prices. Live Happley roduction schedule for strawberries is given in the following table: Labor Output (Number of workers) (Pounds of strawberries) 0 0 1 10 2 19 3 27 4 34 5 40 Suppose that the market wage for strawberry pickers is $118 per worker per day, and the price of strawberries is $16 per pound. On the following graph, use the blue points (circle symbol) to plot Live Happley's labor demand curve when the output price is $16 per pound. Note: Remember to plot each point between the two integers. For example, when the number of workers increases from 0 to 1, the value of the narginal product of for the first worker should be plotted with a horizontal coordinate of 0.5, the value halfway between 0 and 1. Line segments wil utomatically connect the points. ? 200 180 Demand P= $16 160 140 Demand P $12 120 100 80 60 40 20 0 0 2 3 LABOR (Number of workers) at the given wage and price level, Live Happley should hire Suppose that the price of strawberries decreases to $12 per pound, but the wage rate remains at $118. On the previous graph, use the purple points (diamond symbol) to plot Live Happley's labor demand curve when the output price is $12 per pound. WAGE (Dollars per worker)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:## 4. Profit Maximization
Consider Live Happley Fields, a small player in the strawberry business whose production has no individual effect on wages and prices. Live Happley's production schedule for strawberries is given in the following table:
### Labor and Output Schedule
| Labor (Number of workers) | Output (Pounds of strawberries) |
|---------------------------|---------------------------------|
| 0 | 0 |
| 1 | 10 |
| 2 | 19 |
| 3 | 27 |
| 4 | 34 |
| 5 | 40 |
Suppose that the market wage for strawberry pickers is $118 per worker per day, and the price of strawberries is $16 per pound.
### Graph Instructions
On the following graph, use the blue points (circle symbol) to plot Live Happley's labor demand curve when the output price is $16 per pound.
Note: Remember to plot each point between the two integers. For example, when the number of workers increases from 0 to 1, the value of the marginal product for the first worker should be plotted with a horizontal coordinate of 0.5, the value halfway between 0 and 1. Line segments will automatically connect the points.
#### Graph Explanation
The graph has the "Labor (Number of workers)" on the x-axis ranging from 0 to 5 and the "Wage (Dollars per worker)" on the y-axis, ranging from 0 to 200. Two demand curves are plotted:
- A blue line represents the demand when the price is $16 (labeled "Demand P = $16").
- A purple line represents the demand when the price is $12 (labeled "Demand P = $12").
### Workforce Decision
At the given wage and price level, Live Happley should hire ___________.
Suppose that the price of strawberries decreases to $12 per pound, but the wage rate remains at $118.
### Additional Graph Instructions
On the previous graph, use the purple points (diamond symbol) to plot Live Happley's labor demand curve when the output price is $12 per pound.
---
Use the graph to make informed decisions about the number of workers that should be hired based on varying prices and wages in the strawberry market.
![**Economics Practice Problems - Labor and Production Costs**
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Now Live Happily should hire **[dropdown menu]** when the output price is $12 per pound.
Assuming that all strawberry-producing firms have similar production schedules, a decrease in the price of strawberries will cause the **[dropdown menu]** strawberry pickers to **[dropdown menu]**.
Suppose that wages decrease to $100 due to a decreased demand for workers in this market. Assuming that the price of strawberries remains at $12 per pound, Live Happily will now hire **[dropdown menu]**.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F88d58220-4c99-4038-b9cd-5ff14daeb0cb%2F64747569-c568-474d-b35c-2f93ac78ef9c%2F2g19djq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Economics Practice Problems - Labor and Production Costs**
---
Now Live Happily should hire **[dropdown menu]** when the output price is $12 per pound.
Assuming that all strawberry-producing firms have similar production schedules, a decrease in the price of strawberries will cause the **[dropdown menu]** strawberry pickers to **[dropdown menu]**.
Suppose that wages decrease to $100 due to a decreased demand for workers in this market. Assuming that the price of strawberries remains at $12 per pound, Live Happily will now hire **[dropdown menu]**.
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