e. Suppose that firm adopts a new technology that doubles output as each level of employment and the price of keychains remains at 3$. What is the effect of this new technology on MPL and MRPL? at wage = 40$, how many workers should the firm hire now?

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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2. Consider Kadokawa.inc, a merchandising
company in japan producing keychain with a flat
rate of 3$ per keychain.
Number
Number of
MPL TR
MRPL
of
keychains
produced
per day
Workers
1
30
.....
2
80
.....
3
110
.....
4
135
.....
20
.....
.....
6.
170
....
.....
7
30
.....
8
15
a. Fill in all the blanks in the table above
b. Verify that MRPL for this firm can be
calculated in two ways: (1) change in TR
from an additional worker and (2) MPL times
the price of output
c. Calculate how many workers should be hired
when wage = 40$ per worker perday and
why?, calculate and prove that the profit
earned is optimal at your current quantity of
labor and not at n+1.
d. Calculate how many workers should be hired
when wage = 55$ per worker, why?, calculate
and prove that the profit earned is optimal at
your current quantity of labor and not at n+1.
e. Suppose that firm adopts a new technology
that doubles output as each level of
employment and the price of keychains
remains at 3$. What is the effect of this new
technology on MPL and MRPL? at wage =
40$, how many workers should the firm hire
now?
Transcribed Image Text:2. Consider Kadokawa.inc, a merchandising company in japan producing keychain with a flat rate of 3$ per keychain. Number Number of MPL TR MRPL of keychains produced per day Workers 1 30 ..... 2 80 ..... 3 110 ..... 4 135 ..... 20 ..... ..... 6. 170 .... ..... 7 30 ..... 8 15 a. Fill in all the blanks in the table above b. Verify that MRPL for this firm can be calculated in two ways: (1) change in TR from an additional worker and (2) MPL times the price of output c. Calculate how many workers should be hired when wage = 40$ per worker perday and why?, calculate and prove that the profit earned is optimal at your current quantity of labor and not at n+1. d. Calculate how many workers should be hired when wage = 55$ per worker, why?, calculate and prove that the profit earned is optimal at your current quantity of labor and not at n+1. e. Suppose that firm adopts a new technology that doubles output as each level of employment and the price of keychains remains at 3$. What is the effect of this new technology on MPL and MRPL? at wage = 40$, how many workers should the firm hire now?
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