4. Profit maximizationConsider Blewitt's Farm, a small blueberry grower relative to the size of the market whose production has no impact on wages and prices. Thefollowing table presents Blewitt's production schedule for blueberries:LaborOutput(Number of workers) (Pounds of blueberries)0012345сл2038546880Suppose 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 themarginal 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 willautomatically connect the points.WAGE (Dollars per worker)3002702402101801501209060300012LABOR (Number of workers)At the given wage and price level, Blewitt's should hireDemand P = $13Now Blewitt's should hireDemand P = $15Suppose 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 theblueberry pickers toSuppose that wages increase to $250 due to an increased demand for workers in this market. Assuming that the price of blueberries remains at $15per pound, Blewitt's will now hire

The marginal product of labor measures the change in output production due to a change in the number…

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

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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