9 See Hint The cookie company in the mall hires only labor to produce cookies. T

Question

9 See Hint The cookie company in the mall hires only labor to produce cookies. The workers are paid $75 per day, and the cost of renting the space in the mall is $250 per day. Number of workers 1 2 3 4 Daily output (cookies) 200 400 600 700 The daily fixed costs of production are Choose one: O A. $325 B. $75 C. $150. D. $0. E. $250 The labor cost per day of hiring two workers is The total cost per day when three workers are hired is The marginal product per day of the fourth worker is s cookies.

Explanation / Answer

Answer
the marginal product of n labor=total product of n labor - the total product of n-1 labor
Marginal revenue product=marginal product*price
the firm employ input up to marginal revenue product equal to the wage
MRP=wage

Q1
the fixed cost is the cost of renting space that is $250
option E

Q2
The labor cost of hiring 2 worker =wage*number of labor=2*75=150

Q3
total cost=FC+VC
=250+3*75
=475
Q4
MP(4)=700-600=100 units

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