es cow\'s milk and sells it to a local store for $2.20 per gallon. Agricultu Map

Question

es cow's milk and sells it to a local store for $2.20 per gallon. Agricultu Map Martin's workers in the area are paid a fixed wage rate of S125 per day. Use this information and the information i table below to answer the questions that follow. Assume that the milk farm is profit maximizing ical Milk Farm Workers QuantityWhat is the marginal product of labor (MPL) of milk per day (gallons) 0 100 for employing a third worker? Number 0 gallons 2 What is the value of the marginal pr labor (VMPL) for employing a sixth worker? oduct of 275 325 350 370 Number 6 How many employees should Martin's farm employ? Number employees How many employees should Martin's farm employ if the price he received per gallon of milk rose to $2.50? Number employees

Explanation / Answer

Answer
MPL of n th labor=Total product of n labor-total product of n-1 labors

Q1
MPL(3)=TP(3)-TP(2)
=275-195
=80 units

Q2

MPL(6)=370-350=20 units

Q3
The optimum employee is at MRP=wage
MRP=MPL*price
MPL(4)=325-275=50
MRPL(4)=50*2.2=110
the wage rate is higher than $110 so the optimum higher is 3 labor because the MRPL of 3 rd worker is
=80*2.2=176

Q4)
If the price is 2.5
then the MRP(4)=50*2.5=125
so the firm will employ 4 workers

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.