18 Question (2 points) See page 434 Bob, the owner of Horn Guitars, is consideri

Question

18 Question (2 points) See page 434 Bob, the owner of Horn Guitars, is considering expanding his business. To do so, he must hire additional workers. Suppose he has three possible employees: Eric, Carlos, and Jimmy. The table below lists how many guitars each worker can produce per week. Use the information in the table to answer the questions that follow Worker Guitars produced per week Carlos 3 immy 1st attempt Part 1 (1 point) See Hint Suppose Bob can sell a guitar for $400. If Bob pays his workers $750 per week, he will hire Part 2 (1 point) See Hint Bob's marginal profit from hiring these workers is s

Explanation / Answer

Output Marginal revenue Marginal cost Marginal profit Marginal profit per unit Eric 5 2000 750 1250 250 Carlos 3 1200 750 450 150 Jimmy 2 800 750 50 25 Therefore, Bob shall hire: All the three workers i.e. Eric, Carlos and Jimmy Marginal profits earned from last worker, Jimmy is $ 50 Marginal profit per guitar is $ 25 per guitar

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