Suppose a firm producing baseball, it is operating in the short run. The price of baseball is $5, the hourly wage is $12, and each baseball requires $1 worth of material. The firm has experimented with different workforces and the results are shown in the first two columns of the following table. 1. Fill in the blanks in the table. 2. Is it sensible to continue to operate at a loss with 14 workers? 3. Would it be better to operate with 15 workers? Explain, using the marginal principle. Workers 14 15 Baseball 56 60 Labor Material Variable Total Cost Cost Cost Revenue Marginal Cost

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Suppose a firm producing baseball, it is operating in the short run. The price of baseball is $5,
the hourly wage is $12, and each baseball requires $1 worth of material. The firm has
experimented with different workforces and the results are shown in the first two columns
of the following table.
1. Fill in the blanks in the table.
2. Is it sensible to continue to operate at a loss with 14 workers?
3. Would it be better to operate with 15 workers? Explain, using the marginal principle.
Workers Baseball
14
15
56
60
Labor Material Variable Total
Cost
Cost
Cost
Revenue
Marginal
Cost
Transcribed Image Text:Suppose a firm producing baseball, it is operating in the short run. The price of baseball is $5, the hourly wage is $12, and each baseball requires $1 worth of material. The firm has experimented with different workforces and the results are shown in the first two columns of the following table. 1. Fill in the blanks in the table. 2. Is it sensible to continue to operate at a loss with 14 workers? 3. Would it be better to operate with 15 workers? Explain, using the marginal principle. Workers Baseball 14 15 56 60 Labor Material Variable Total Cost Cost Cost Revenue Marginal Cost
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