n below to answer questions 4 and 5. labor l of labor produces widgets and sells
ID: 1116705 • Letter: N
Question
n below to answer questions 4 and 5. labor l of labor produces widgets and sells them in a perfectly competive idh The tfunction is given in the chart below firm hires workers in a perfectly competitive labor tion function is given in the chart below market for $75 uic per day. ABC Labor Output Per Day 0 2 4 240 t 420110 5305 5801 600 4. The marginal product (MP) of the second worker is value of the marginal product (VMP) of the second worker is s c. 210;420 d. 210; 105 a. 180; 90 b. 180; 360 5. To maximize profit, ABC Manufacturing should hire: c. 4 workers. d. 5 workers. a. 2 workers. b. 3 workers.Explanation / Answer
Answer 4. The Marginal product of the second worker and the value of marginal product:-
b. 180; 360
Marginal product = Output of worker 1 and 2 minus output of worker 1. i.e., 420-240=180.
Value of Marginal product = Marginal ouput * value of each output. i.e., 180*2=360.
Ans 5:- 4 workers. Max profit $860 earned.
Profit earned:-
1 worker =240*2-75=405
2 worker =420*2-150=690
3 worker =530*2-225=835
4 worker =580*2-300=860*
5 worker =600*2-375=825
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