Refers to Figure 18-1. Suppose the firm sells its output for $15 per unit, and it pays each of its workers $750 per week. When output increases from 210 units to 285 units, the a. marginal cost is $10 per unit of output. b. marginal revenue is $5 per unit of output. c. value of the marginal product of labor is $4,275. d. firm's profit decreases. Please explain why the answer is a.
Refers to Figure 18-1. Suppose the firm sells its output for $15 per unit, and it pays each of its workers $750 per week. When output increases from 210 units to 285 units, the a. marginal cost is $10 per unit of output. b. marginal revenue is $5 per unit of output. c. value of the marginal product of labor is $4,275. d. firm's profit decreases. Please explain why the answer is a.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Refers to Figure 18-1. Suppose the firm sells its output for $15 per unit, and it pays each of its workers $750 per week. When output increases from 210 units to 285 units, the
a. marginal cost is $10 per unit of output.
b. marginal revenue is $5 per unit of output.
c. value of the marginal product of labor is $4,275.
d. firm's profit decreases.
Please explain why the answer is a.
Transcribed Image Text:The image displays a line graph depicting the relationship between \( L \) and \( Q \).
**Axes and Labels:**
- The horizontal axis (\( x \)-axis) is labeled \( L \) and ranges from 0 to 6, marked in increments of 1 unit.
- The vertical axis (\( y \)-axis) is labeled \( Q \) and ranges from 0 to 420, with increments marked at 120, 210, 285, 345, 390, and 420.
**Graph Features:**
- A smooth curve passes through several plotted points, indicating a non-linear (concave upwards) relationship between \( L \) and \( Q \).
- The points of intersection with the vertical grid lines are at approximately (1, 120), (2, 210), (3, 285), (4, 345), (5, 390), and (6, 420).
- Dashed horizontal and vertical lines extend from each data point to the corresponding axis, aiding in visualization of exact values.
This graph can be used for educational purposes to illustrate how \( Q \) increases as \( L \) increases, demonstrating concepts such as production functions in economics or scalability in other fields. The shape of the curve suggests diminishing returns, where increases in \( L \) result in progressively smaller increases in \( Q \).
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