Map Martin\'s Milk Farm ces cow\'s milk and sells it to a local store for $2.20

Question

Map Martin's Milk Farm ces cow's milk and sells it to a local store for $2.20 per gallon. Agricult workers in the area are paid a fixed wage rate of $75 per day. Use this information and the information in the table below to answer the questions that follow. Assume that the milk farm is profit maximizing Warkers QuantityWhat is the product of labor (MPL) of mikfor employing a third worker? per day 0 50 gallons 95 125 145 155 160 2 What is the value of the marginal labor (VMPL) for employing a sixth worker? of Number 5 6 How miany employees should Martin's farm employ? Web Browsers Oper employees You cannot have these browsers for you before QuickClean starts How many employees should Martin's farm the price he received per gallon of milk rose to $2.50? Chrome Number | ennlovees l. Previous @ov" ",O Previous GveUp & View Solution 9 Check A

Explanation / Answer

MPL of employing third worker = 30 gallons

VMPL of employing a sixth worker = $11

Martin's firm should employ 2 workers. Because at 2 workers VMPL > wage rate ,i.e., 99 > 75. After that VMPL < wage rate. If the firm would employ more than 2 workers, it would make loss.

If price rose to $2.50, the firm should employ 3 workers. Because at 3 workers VMPL = wage rate = $75. After that VMPL < wage rate. If the firm would employ more than 3 workers, it would make loss.

Workers Q (gallon) MPL VMPL($) = $2.20 * MPL 0 0 1 50 50 110 2 95 45 99 3 125 30 66 4 145 20 44 5 155 10 22 6 160 5 11

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