You have been hired to manage a small manufacturing facility whose cost and prod
ID: 1095571 • Letter: Y
Question
You have been hired to manage a small manufacturing facility whose cost and production data are given in the table below.
No. of workers Total Labor Cost Output Total Revenue
1 $145 100 $190
2 290 105 480
3 435 111 840
4 580 120 1320
5 725 125 1650
6 870 129 1780
7 1015 131 1800
What is the marginal product of the third worker?
What is the marginal revenue product of the fourth worker?
What is the marginal cost of the sixth worker?
Based on your knowledge of marginal analysis, how many workers should you hire? Explain you answer.
Explanation / Answer
1.
marginal product of the third worker = df/dL = 9
2.
marginal revenue product =dR/dL = 330
3.
marginal cost of the sixth worker dC/dQ = 145
4.
Hire labour till marginal revenue is greater than marginal cost.so optimal point is 4 workers.
No. of workers Total Labor Cost Output Total Revenue MPL MRL MCL 1 145 100 190 5 290 145 2 290 105 480 6 360 145 3 435 111 840 9 480 145 4 580 120 1320 5 330 145 5 725 125 1650 4 130 145 6 870 129 1780 2 20 145 7 1015 131 1800Related Questions
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