Below is a table showing the production numbers for a chair factory (where the p
ID: 1207051 • Letter: B
Question
Below is a table showing the production numbers for a chair factory (where the production numbers are based on chairs being produced per day).
Workers
Total Product
(TP)
Average Product
(AP)
Marginal Product (MP)
Marginal Revenue Product
(MRP)
0
0
-
-
-
1
10
2
15
3
40
4
35
5
190
6
30
7
240
8
250
9
5
a) Fill in the missing numbers for the TP, AP and MP columns (round to the nearest chair)
b) In one sentence explain what the AP of 4 workers being 35 tells us.
c) In one sentence explain what your answer for MP of the 4th worker tells us.
d) Given the fact that each chair produced in our factory can be sold at the market price of $10 per chair, fill in the MRP column (round to the nearest dollar).
e) In one sentence explain what your answer for MRP for the 4th worker tells us.
f) If the market wage for workers doing manufacturing work (such as chair production) is $180 per day, determine the amount of workers this firm should hire to maximize its profit.
Explain your answer using MRP.
Workers
Total Product
(TP)
Average Product
(AP)
Marginal Product (MP)
Marginal Revenue Product
(MRP)
0
0
-
-
-
1
10
2
15
3
40
4
35
5
190
6
30
7
240
8
250
9
5
Explanation / Answer
Please ignore !st table and consider the second one This is a technical error I try to remove it but can't do it because there is no option.
No of workers
TP
AP
MP
MRP=MP*P
Price
TR=TP*P
0
0
-
10
1
10
10
-
-
10
2
30
15
20
200
10
3
70
23.33=24
40
400
10
4
140
35
70
700
10
5
190
38
50
500
10
6
220
36.66=37
30
300
10
7
240
34.28=35
20
200
10
8
250
31.25=32
10
100
10
9
255
28.33=29
5
10
No of workers(L)
TP(Q)
AP=(Q/L)
MP=(change in Q/change in L)
MRP=MP*P
Price
TR=TP*P
0
0
-
10
10
1
10
10
-
-
10
2
30
15
20
200
10
3
70
23.33=24
40
400
10
4
140
35
70
700
10
5
190
38
50
500
10
6
220
36.66=37
30
300
10
7
240
34.28=35
20
200
10
8
250
31.25=32
10
100
10
9
255
28.33=29
5
10
Q1)It's fill in the table.
Q2)The AP is defined as the amount of total product divided by total no of workers so here AP=35 means each worker can produce 35 no chair averagely.
Q3)MP gives us the concept of change in total output due to the change in amount of an input.So here MP of 4th worker 70 means the 4th worker can produce 70 no chair individually where as AP tells that on same row individual worker can produce 35 unit of chair.
Q4)Fill up on the table.
Q5)MRP gives us the concept of change in total revenue due to the change in amount of an input.So here MRP of 4th worker 700 means that total revenue will be change from 400 to 700 i.e 300 unit for 1 unit increase in labour.
Q6)Here the information is insufficient to answer in the above question only labour cost is mentioned where as we don't have any information regarding capital cost so we can't find total to find profit.
No of workers
TP
AP
MP
MRP=MP*P
Price
TR=TP*P
0
0
-
10
1
10
10
-
-
10
2
30
15
20
200
10
3
70
23.33=24
40
400
10
4
140
35
70
700
10
5
190
38
50
500
10
6
220
36.66=37
30
300
10
7
240
34.28=35
20
200
10
8
250
31.25=32
10
100
10
9
255
28.33=29
5
10
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