2. Graphing demand for labor and computing the optimal quantity of labor demanded A company operates in a competitive market, selling each unit of output for a price of $20 and paying the market wage of $270 per day for each worker it hires. In the following table, complete the column for the value of the marginal product of labor (VMPL) at each quantity of workers. Value of the Marginal Product of Labor Marginal Product of Labor (Units of output) Labor Output (Units of output) (Dollars) (Number of workers) 20 20 19 39 18 57 15 72 12 84 On the following graph, use the blue points (circle symbol) to plot the firm's labor demand curve. Then, use the orange line (square symbols) to show the wage rate. (Note: If you cannot place the wage rate at the level you want, move the two end points individually.) Hint: Remember to plot each point halfway 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. 400 360 Demand 320 280 Market Wage Rate 240 200 100 120 80 40 0. 3 LABOR (Number of workers) The profit-maximizing quantity of labor at the market wage is WAGE (Dollars per worker) AAAAA
2. Graphing demand for labor and computing the optimal quantity of labor demanded A company operates in a competitive market, selling each unit of output for a price of $20 and paying the market wage of $270 per day for each worker it hires. In the following table, complete the column for the value of the marginal product of labor (VMPL) at each quantity of workers. Value of the Marginal Product of Labor Marginal Product of Labor (Units of output) Labor Output (Units of output) (Dollars) (Number of workers) 20 20 19 39 18 57 15 72 12 84 On the following graph, use the blue points (circle symbol) to plot the firm's labor demand curve. Then, use the orange line (square symbols) to show the wage rate. (Note: If you cannot place the wage rate at the level you want, move the two end points individually.) Hint: Remember to plot each point halfway 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. 400 360 Demand 320 280 Market Wage Rate 240 200 100 120 80 40 0. 3 LABOR (Number of workers) The profit-maximizing quantity of labor at the market wage is WAGE (Dollars per worker) AAAAA
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:### Graphing Demand for Labor and Computing the Optimal Quantity of Labor Demanded
#### Scenario:
A company operates in a competitive market, selling each unit of output for a price of $20 and paying the market wage of $270 per day for each worker it hires.
#### Task:
Complete the table for the value of the marginal product of labor (VMPL) at each quantity of workers.
#### Table:
| Labor (Number of workers) | Output (Units of output) | Marginal Product of Labor (Units of output) | Value of the Marginal Product of Labor (Dollars) |
|---------------------------|--------------------------|---------------------------------------------|--------------------------------------------------|
| 0 | 0 | | |
| 1 | 20 | 20 | |
| 2 | 39 | 19 | |
| 3 | 57 | 18 | |
| 4 | 72 | 15 | |
| 5 | 84 | 12 | |
#### Instructions:
- On the graph, use the blue points (circle symbol) to plot the firm’s labor demand curve.
- Use the orange line (square symbols) to display the wage rate.
- **Note:** If you cannot place the wage rate at the desired level, adjust the two endpoints individually.
#### Hint:
- Plot each point halfway between integers. For example, for one worker, plot at a horizontal coordinate of 0.5.
#### Graph:
- **Axes:**
- X-axis: Labor (Number of workers)
- Y-axis: WAGE (Dollars per worker)
- **Plot and Lines:**
- The graph will show a demand curve for labor based on the firm's marginal product of labor.
- A horizontal line will represent the market wage rate.
#### Conclusion:
The optimal quantity of labor at the market wage can be determined by finding where the market wage rate intersects the demand curve.
*(Note: The chart is visualized but empty for inputs. For complete analysis, complete and plot the data accordingly.)*
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