A company operates in a price-taker market, selling each unit of output for a price of $30 and paying the market wage of $285 per day for each worker it hires. In the following table, complete the column for the marginal revenue product of labor (MRP of labor) at each quantity of workers. Labor (Number of workers) 0 1 2 3 4 5 AGE (Dollars per worker) 500 450 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. 400 350 300 250 200 Output (Units of output) 0 16 31 45 56 64 150 Marginal Product of Labor (Units of output) 16 15 14 11 8 Demand -0- Marginal Revenue Product of Labor (Dollars) Market Wage Rate
A company operates in a price-taker market, selling each unit of output for a price of $30 and paying the market wage of $285 per day for each worker it hires. In the following table, complete the column for the marginal revenue product of labor (MRP of labor) at each quantity of workers. Labor (Number of workers) 0 1 2 3 4 5 AGE (Dollars per worker) 500 450 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. 400 350 300 250 200 Output (Units of output) 0 16 31 45 56 64 150 Marginal Product of Labor (Units of output) 16 15 14 11 8 Demand -0- Marginal Revenue Product of Labor (Dollars) Market Wage Rate
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter14: Labor Markets And Income
Section: Chapter Questions
Problem 23RQ: What is the marginal cost of labor?
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Ab 9
Economics
Transcribed Image Text:2. Graphing demand for labor and computing the optimal quantity
A company operates in a price-taker market, selling each unit of output for a price of $30 and paying the market
wage of $285 per day for each worker it hires.
In the following table, complete the column for the marginal revenue product of labor (MRP of labor) at each
quantity of workers.
WAGE (Dollars per worker)
Labor
(Number of
workers)
0
1
2
3
4
5
500
450
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.
400
350
300
250
200
150
100
50
0
Output
(Units of
output)
0
16
31
45
56
64
0
1
2
3
LABOR (Number of workers)
Marginal Product of
Labor
(Units of output)
4
16
15
14
11
8
5
Demand
Market Wage Rate
The profit-maximizing quantity of labor at the market wage is
(?)
Marginal Revenue Product of
Labor
(Dollars)
one worker
two workers
three workers
four workers
five workers
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