No HOMEWORK 4 AGEC 2303-FALL 201 Table 1. Determining the profit-maximizing poin
ID: 1112143 • Letter: N
Question
No HOMEWORK 4 AGEC 2303-FALL 201 Table 1. Determining the profit-maximizing point of labor use Marginal Labor Average MarginaNet Revenue Marginal Revenue Cost (S/unit of Total Labor Product (AP) | Product (MP) | Labor per Total month l production (TP) (S) | (S/unit of labor) labor) Cost ($) Profit ($ - 30 3000 4000 4000 -1000 1000 180 12000 26060 60 240 4000 | 16000| 80 285 324 336 45 39 12 24000 28500 32400 33600 4500 4000 24000 28000 32000 36000 40000-10000 8400 36423360o 3243612 32400 0 1600 1200 -3600 10 300 30 24 2400 Extra information needed: The net revenue per unit of output (excluding Labor) is $100Explanation / Answer
4 . From table as we see , Profits are maximized at L= 5 .
5. Marginal cost must decrease by 2000 , to make it profitable to hire another unit of labour.
6
LABOUR
TP
NET REVENUE
COST
PROFITS
0
0
0
0
1
30
6000
4000
2000
2
90
18000
8000
10000
3
180
36000
12000
24000
4
240
48000
16000
32000
5
285
57000
20000
37000
6
324
64800
24000
40800
7
336
67200
28000
39200
8
336
67200
32000
35200
9
324
64800
36000
28800
10
300
60000
40000
20000
Profits are maximized at L= 6
7. We will equate marginal revenue product of labour with wages.
LABOUR
TP
NET REVENUE
COST
PROFITS
0
0
0
0
1
30
6000
4000
2000
2
90
18000
8000
10000
3
180
36000
12000
24000
4
240
48000
16000
32000
5
285
57000
20000
37000
6
324
64800
24000
40800
7
336
67200
28000
39200
8
336
67200
32000
35200
9
324
64800
36000
28800
10
300
60000
40000
20000
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