A company operates in a competitive market, selling each unit of output for a price of $20 and paying the market wage of $330 per day for each worker it hires.
A company operates in a competitive market, selling each unit of output for a price of $20 and paying the market wage of $330 per day for each worker it hires.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
A company operates in a competitive market, selling each unit of output for a price of $20 and paying the market wage of $330 per day for each worker it hires.
![2. Graphing demand for labour and computing the optimal quantity
A company operates in a competitive market, selling each unit of output for a price of $20 and paying the market wage of $330 per day for each
worker it hires.
In the following table, complete the column for the value of the marginal product of labour (VMPL) at each quantity of workers.
Labour
Output
(Number of workers) (Units of output) (Units of output)
Marginal Product of Labour Value of the Marginal Product of Labour
(Dollars)
20
1
20
19
2
39
18
3
57
15
4
72
12
84
On the following graph, use the blue points (circle symbol) to plot the firm's labour demand curve. Then, use the orange line (square symbol) 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 O and 1. Line segments will
automatically connect the points.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Faa9424a8-2a15-4b7f-a387-3fad8a67bca9%2Fe9135d27-8d4f-4ccc-a4a6-a716c16f9c1c%2Fbm5m6o_processed.png&w=3840&q=75)
Transcribed Image Text:2. Graphing demand for labour and computing the optimal quantity
A company operates in a competitive market, selling each unit of output for a price of $20 and paying the market wage of $330 per day for each
worker it hires.
In the following table, complete the column for the value of the marginal product of labour (VMPL) at each quantity of workers.
Labour
Output
(Number of workers) (Units of output) (Units of output)
Marginal Product of Labour Value of the Marginal Product of Labour
(Dollars)
20
1
20
19
2
39
18
3
57
15
4
72
12
84
On the following graph, use the blue points (circle symbol) to plot the firm's labour demand curve. Then, use the orange line (square symbol) 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 O and 1. Line segments will
automatically connect the points.
![On the following graph, use the blue points (circle symbol) to plot the firm's labour demand curve. Then, use the orange line (square symbol) 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 O and 1. Line segments will
automatically connect the points.
400
360
Demand
320
280
240
Market Wage Rate
200
160
120
B0
one worker
40
two workers
three workers
1
LABOUR (Number of workers)
four workers
five workers
The profit-maximizing quantity of labour at the market wage is
WAGE(Dollars per worker)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Faa9424a8-2a15-4b7f-a387-3fad8a67bca9%2Fe9135d27-8d4f-4ccc-a4a6-a716c16f9c1c%2Fqmt2ksy_processed.png&w=3840&q=75)
Transcribed Image Text:On the following graph, use the blue points (circle symbol) to plot the firm's labour demand curve. Then, use the orange line (square symbol) 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 O and 1. Line segments will
automatically connect the points.
400
360
Demand
320
280
240
Market Wage Rate
200
160
120
B0
one worker
40
two workers
three workers
1
LABOUR (Number of workers)
four workers
five workers
The profit-maximizing quantity of labour at the market wage is
WAGE(Dollars per worker)
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