15, Given the following chart and Price = S15 and wage-S30 Wage VMPL MPL 10 25 4
ID: 1122515 • Letter: 1
Question
15, Given the following chart and Price = S15 and wage-S30 Wage VMPL MPL 10 25 45 a. Complete Table b. Identify the amount of Labor that causes diminishing marginal return Identify the amount of Labor that causes negative marginal return c. d. How many workers should be hired to maximize profits? 16. The optimal action for a monopoly firm is setting_equal to 17. Assume that Ed-0.08 and there was a 20% increase in quantity demanded. Find the income 18. If wage rate is $10/per hour, capital cost-$20/per hour, marginal product of labor-$80/unit and (19: P= 15-025Q and TC-2Q. Find the profit maximizing output elasticity of price marginal product of capital- 100 units. Which one should you produce more Oligopoly: Perfect Competition: of? and price und A firm produces 200 units. Average fixed costs are $20 and total costs are $5000. Find AVC. 21. Q 50 P/2 and TC1-24Q, TC2 32Q Find each firm's reaction function. Profit maxim price and output for each firm. Find the profit for each firm. 22. Given the following game theory matrix Player 2 Strategy CD Player 1 30, 120120, 40 80,-40 B 70, 70 -40, 150 220, 80 -20, 80 50, -30 -50, 120 a. Identify Player 1 Dominant and Secure strategy b. Identify Player 2 Dominant and Secure strategy c. Identify Nash Equilibrium (if there is any) 23. Given the following game theory matrix of an infinite repeating game: Player 2 Strategy Player 1 A 10, 10 60, -20 -20, 60 35, 35 a. Identify Player 1 and Player 2 Dominant StrategyExplanation / Answer
15. a.
L
Q
MPL
VMPL
Wage
0
0
-
1
10
10 – 0 = 10
Price * MPL = 10*$15 = $150
$30
2
25
25 – 10 = 15
15 * $15 = $225.
$30
3
45
45 – 25 = 20
20 * $15 = $300
$30
4
60
60 – 45 = 15
15 * $15 = $225.
$30
5
55
55 – 60 = -5
-5 * $15 = -$75.
$30
b. The MPL starts going down at the 4th unit of labor. So, diminishing marginal return starts when 4 laborers are hired.
c. The MPL is negative at the 5th unit of labor. So, negative marginal return starts when 5 laborers are hired.
d. To maximize profits, 4 laborers should be hired. A firm can keep maximizing profit to the point the VMPL equals the wage. The moment VMPL is less than the wage, the profit-maximizing firm should stop hiring. In this case, VMPL is less than wage at the 5th units of labor. So, the firm should hire 4 laborers to maximize profits.
L
Q
MPL
VMPL
Wage
0
0
-
1
10
10 – 0 = 10
Price * MPL = 10*$15 = $150
$30
2
25
25 – 10 = 15
15 * $15 = $225.
$30
3
45
45 – 25 = 20
20 * $15 = $300
$30
4
60
60 – 45 = 15
15 * $15 = $225.
$30
5
55
55 – 60 = -5
-5 * $15 = -$75.
$30
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