Kaiser\'s lce Cream Parlour hires workers to produce milk shakes The market for
ID: 1120122 • Letter: K
Question
Kaiser's lce Cream Parlour hires workers to produce milk shakes The market for milk shakes is perfectly competitive, and the price of a milk shake is $3.50. The labour market is competitive, and the wage rate is $35.00 a day. The table shows the workers' total product schedule. Kaiser's installs a new soda fountain that increases the productivity of workers by 50 percent. If the price remains at $3.50 a milk shake and the wage changes to $42.00 a day, how many workers will Kaiser's hire? Milk shakes per day 24 36 46 54 58 Workers 2 3 4 Kaiser's will hire workers.Explanation / Answer
Milk shakes produced per day due to increased productivity = Milk shakes per day x 1.5 times
Revenue = Price x Quantity produced per day
Costs = Number of workers x wage rate per worker per day
Profit = Revenue - costs
kaiser will hire 4 or 5 workers
Workers Milk shake per day Milk shakes produced per day due to increased productivity Revenue Costs Profits 2 24 36 126 84 42 3 36 54 189 126 63 4 46 69 241.5 168 73.5 5 54 81 283.5 210 73.5 6 58 87 304.5 252 52.5Related Questions
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