4. Find the marginal revenue product (MRP) for each value of L, assuming the price of a pizza is $10. 5. If the price of a pizza is $10 and each chef’s wage is $50 per day, how many chefs will this competitive pizza shop hire in order to maximize profits? 6. At the optimal quantity of labor, the (economic) profit equals $_______.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Use the following table to answer the questions below.
| Number of Chefs | Number of Pizzas produced per day |
| 1 | 5 |
| 2 | 25 |
| 3 | 40 |
| 4 | 50 |
| 5 | 55 |
| 6 | 58 |
| 7 | 58 |
- Find the marginal product (MP) for each value of L.
Chefs Pizzas MPL 1 5 5 2 25 20 3 40 15 4 50 10 5 55 5 6 58 3 7 58 0 - The firm is experiencing increasing returns with how many workers?
The increasing returns mean the increase in the marginal product of labor due to the increase in the number of labor or workers. The marginal product of labor is 20 at 2 workers and the marginal product of labor would decrease to 15 with an additional worker so, the firm is experiencing increasing returns with 2 workers.
3. At what number of workers will diminishing marginal returns begin?
The increasing returns mean the increase in the marginal product of labor due to the increase in the number of labor or workers. The marginal product of workers is started to fall from the 3 labor units so the diminishing returns begin from the employment of 3 workers.
4. Find the marginal revenue product (MRP) for each value of L, assuming the price of a pizza is $10.
5. If the price of a pizza is $10 and each chef’s wage is $50 per day, how many chefs will this competitive pizza shop hire in order to maximize profits?
6. At the optimal quantity of
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