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Consider Blewitt's Farm, a small blueberry grower relative to the size of the market whose production has no impact on wages and prices. The following table presents Blewitt's production schedule for blueberries:

Consider Blewitt's Farm, a small blueberry grower relative to the size of the market whose production has no impact on wages and prices. The following table presents Blewitt's production schedule for blueberries:

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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4. Profit maximization Consider Blewitt's Farm, a small blueberry grower relative to the size of the market whose production has no impact on wages and prices. The following table presents Blewitt's production schedule for blueberries: Labor Output (Number of workers) (Pounds of blueberries) 0 0 1 2 3 4 5 сл 20 38 54 68 80 Suppose that the market wage for blueberry pickers is $200 per worker per day, and the price of blueberries is $13 per pound.
Transcribed Image Text:4. Profit maximization Consider Blewitt's Farm, a small blueberry grower relative to the size of the market whose production has no impact on wages and prices. The following table presents Blewitt's production schedule for blueberries: Labor Output (Number of workers) (Pounds of blueberries) 0 0 1 2 3 4 5 сл 20 38 54 68 80 Suppose that the market wage for blueberry pickers is $200 per worker per day, and the price of blueberries is $13 per pound.
On the following graph, use the blue points (circle symbol) to plot Blewitt's labor demand curve when the output price is $13 per pound. Note: Remember to plot each point between the two integers. For example, when the number of workers increases from 0 to 1, the value of the marginal product of 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. WAGE (Dollars per worker) 300 270 240 210 180 150 120 90 60 30 0 0 1 2 LABOR (Number of workers) At the given wage and price level, Blewitt's should hire Demand P = $13 Now Blewitt's should hire Demand P = $15 Suppose that the price of blueberries increases to $15 per pound, but the wage rate remains at $200. On the previous graph, use the purple points (diamond symbol) to plot Blewitt's labor demand curve when the output price is $15 per pound. when the output price is $15 per pound. Assuming that all blueberry-producing firms have similar production schedules, an increase in the price of blueberries will cause the blueberry pickers to Suppose that wages increase to $250 due to an increased demand for workers in this market. Assuming that the price of blueberries remains at $15 per pound, Blewitt's will now hire
Transcribed Image Text:On the following graph, use the blue points (circle symbol) to plot Blewitt's labor demand curve when the output price is $13 per pound. Note: Remember to plot each point between the two integers. For example, when the number of workers increases from 0 to 1, the value of the marginal product of 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. WAGE (Dollars per worker) 300 270 240 210 180 150 120 90 60 30 0 0 1 2 LABOR (Number of workers) At the given wage and price level, Blewitt's should hire Demand P = $13 Now Blewitt's should hire Demand P = $15 Suppose that the price of blueberries increases to $15 per pound, but the wage rate remains at $200. On the previous graph, use the purple points (diamond symbol) to plot Blewitt's labor demand curve when the output price is $15 per pound. when the output price is $15 per pound. Assuming that all blueberry-producing firms have similar production schedules, an increase in the price of blueberries will cause the blueberry pickers to Suppose that wages increase to $250 due to an increased demand for workers in this market. Assuming that the price of blueberries remains at $15 per pound, Blewitt's will now hire
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