Below is the production scheduale for gizmos. It shows the relationship between

Question

Below is the production scheduale for gizmos. It shows the relationship between the number of workers hired (L) and output (Q). In addition, if the firm want to hire more workers it has to raise the wage rate that must be paid

L Q Wage Rate
0 0 0
1 50 60
2 105 64
3 166 68
4 224 72
5 278 76
6 328 80
7 375 84
8 418 88
9 457 92
10 492 96
11 522 100
12 548 104
1) What is the marginal product of the 6th worker?
2) What is the average product of 9 workers?
3) What is the marginal cost of hiring the 7th worker?
4) At what quantity of workers is the average product a maximum? What is the maximum?
5) If I could sell all of the ouput I want at a price of $4.00 how many workers should I hire if I am to maximize profits? What are my maximum profits?
6) Now assume that I can only sell a unit of ouput for $3.00. How many workers should I now hire if I am to maximize profits? What are my maximum profits?

Explanation / Answer

1) MP of 6th worker = change in o/p when 6th person was employed = 328-278 = 50 ;

2) AP of 9th worker = 457/9 = 50.778 ;

3) MC of hiring 7th worker = 84-80 = 4;

4) AP is max at 4th worker , APC = 56 ;

5) for max . profit 1008 , by employig 9 workers .

6) profit max is 550 by employ 7 workers .

in all the above parts , form a table and then solve . it will be a easy task

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