In the short run, labor is a hat-making firm’s only variable input. Wage rate is $5.00/hour. The firm currently employs a certain amount of labor H (hours), such that the marginal product of labor is 10 hats per worker-hour, and average product is 15 hats per worker-hour. MPL(H) = 10; APL(H) = 15. (Note: marginal and average products of labor for this firm are not constant. 10 and 15 are their values at a particular point, H, not everywhere.) What is the marginal cost of a hat for that firm?

In the short run, labor is a hat-making firm’s only variable input. Wage rate is $5.00/hour. The firm currently employs a certain amount of labor H (hours), such that the marginal product of labor is 10 hats per worker-hour, and average product is 15 hats per worker-hour. MPL(H) = 10; APL(H) = 15. (Note: marginal and average products of labor for this firm are not constant. 10 and 15 are their values at a particular point, H, not everywhere.) What is the marginal cost of a hat for that firm?

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter7: Production And Cost In The Firm

Section: Chapter Questions

Problem 3.9P

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