This Question: 1 pt 13 of 17 This Quiz: 20 pts possible Master Manufacturing pro

Question

This Question: 1 pt 13 of 17 This Quiz: 20 pts possible Master Manufacturing produces coloured pencils which sell competitively at S0.80 each. The current equilibrium wage rate is $12.00 per hour. Complete parts a through c L QMP MRP WAGE 21 32 123 (Type integers or decimals rounded to two decimal places as needed. Do not include the $ symbol in your answers.) b) How many workers will Master Manufacturing hire? Master Manufacturing wil hire worker(s). (Type a whole number.) c) Suppose the firm's workers unionize and negotiate a new wage rate of $16.00 per hour. How many workers will the firm hire now? The firm will hire worker(s). Enter your answer in each of the answer boxes.

Explanation / Answer

Ans)

a.

b.

The firm will hire until MRP=Wage so the firm hires 5 laborers when the wage is $12.

c.

The firm will hire until MRP=Wage so the firm hires 1 laborer when the wage is $16.

L Q MP=TPn-TPn-1 Price MRP=Price*MP Wage New Wage 0 0 0.8 0 12 16 1 21 21 0.8 16.8 12 16 2 53 32 0.8 25.6 12 16 3 77 0.8 0 12 16 4 96 19 0.8 15.2 12 16 5 111 15 0.8 12 12 16 6 123 12 0.8 9.6 12 16

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