Ted’s café hires workers to produce lattes. The market for lattes is competitive and the price of a latte is $4. The labor market is also competitive, and the wage rate is $40 a day. The table shows the workers’ total product schedule.If Ted’s Cafe is one of 300 firms in the latte market, how many workers will be employed in the market at this price?Ted’s Café installs a new latte equipment that increases the productivity of workers by 50%. If the price of a latte remains at $4 and the wage rises to $48 a day, how many workers does Ted Café hire and why? Units of LaborUnits of OutputMPLVMPLУMPLР-$4P=$517221145670333124860443104050551832406.5541620

A production function shows the relationship between the input used and output produced in a…

Answered: Ted’s café hires workers to produce…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Ted’s café hires workers to produce lattes. The market for lattes is competitive and the price of a latte is $4. The labor market is also competitive, and the wage rate is $40 a day. The table shows the workers’ total product schedule.

If Ted’s Cafe is one of 300 firms in the latte market, how many workers will be employed in the market at this price?
Ted’s Café installs a new latte equipment that increases the productivity of workers by 50%. If the price of a latte remains at $4 and the wage rises to $48 a day, how many workers does Ted Café hire and why?

Units of Labor
Units of Output
MPL
VMPL
УMPL
Р-$4
P=$5
1
7
2
21
14
56
70
3
33
12
48
60
4
43
10
40
50
5
51
8
32
40
6.
55
4
16
20

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