The corresponding table shows the production and cost information for a perfectl

Question

The corresponding table shows the production and cost information for a perfectly competitive firm that produces anvils Number of What is the price o Quanity Total Cost Total Produced f each anvil? Revenue Workers 12.5 25 Number 20 $2.50 2 43 59 78 90 115 143 174 32 4 Assume the company currently employs 1.0 workers. If they add one worker so they have 2.0 workers, what is the additional workers marginal (physical) product? 40 100 physical47 shows the benefit of 58 an additional worker 6 Incorrect. Margi 132.5 145 160 53 Number Units measured in terms of 6 additional physical output produced Assume the company currently employs 2.0 workers. If they add one worker so they have 3.0 workers, marginal revenue product? what is the additional workers Number 15

Explanation / Answer

(1) Price = Total revenue (TR) / Quantity = $12.5 / 5 = $2.5

(2)

Additional marginal physical product when 2 workers are used = Quantity produced with 2 workers - Quantity produced with 1 worker

= 10 - 5

= 5

(3)

Additional worker's marginal revenue product when 3 workers are used = TR with 3 workers - TR with 2 worker

= $55 - $25

= $30

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