(A) Calculate the marginal product of labor for each level of labor use. (B) Assume the price of the output is $5 per unit. Assume the firm is in a perfectly competitive output and input market. Calculate the VMP and MRP of labor. (C) Assume the wage rate is $30. How many units of labor does this firm hire?

(A) Calculate the marginal product of labor for each level of labor use. (B) Assume the price of the output is $5 per unit. Assume the firm is in a perfectly competitive output and input market. Calculate the VMP and MRP of labor. (C) Assume the wage rate is $30. How many units of labor does this firm hire?

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter7: Production And Cost In The Firm

Section7.A: Appendix: A Closer Look At Production And Cost

Problem 1AQ

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workers ouput marginal product total cost average total cost marginal cost 0 0 0 200 0 $0 1 20 20 300 $15 $5 2 50 30 400 $8 $3.33 3 90 40 500 $5.56 $2.50 4 120 30 600 $5 $3.33 5 140 20 700 $5 $5 6 150 10 800 $5.33 $10 7 155 5 900 $5.8 $20 can you explain diminishing marginal product based on these numbers?
5. What is the average product of labor, given that the level of labor equals 10, total outout equals 1200 and the marginal product of labor equals 200?