Terrell\'s Televisions Number of Workers Output of Televisions per Week Marginal
ID: 1238693 • Letter: T
Question
Terrell's TelevisionsNumber of Workers Output of Televisions per Week Marginal Product of Labor (MP)
0 0
1 8
2 15
3 21
4 26
5 30
6 33
Product Price Marginal Revenue Product of Labor (MRP) Wage (Dollars Per Week)
$300 $1,800
$300 1,800
$300 1,800
$300 1,800
$300 1,800
$300 1,800
$300 1,800
Additional Profit from Hiring One More Worker
A. Fill in the formula for MP, MRP, and Additional Profit at the top of the column in the gray sections within the table.
B. Fill in the missing values for MP, MRP, and Additional Profit in the blue sections of the table.
C. Identify the profit-maximizing quantity of labor. Explain how you arrived at your answer.
D. Is this firm a price taker or a price maker? Explain.
Explanation / Answer
Number of Workers
Output of Televisions per Week
Marginal Product of Labor (television sets per week)
Product Price
Marginal Revenue Product of Labor (dollars per week)
Wage (dollars per week)
Additional Profit from Hiring One More Worker (dollars per week)
L
Q
MP
P
MRP =
P x MP
W
MRP W
0
0
$300
$1,800
1
8
8
300
$2,400
1,800
$600
2
15
7
300
2,100
1,800
300
3
21
6
300
1,800
1,800
0
4
26
5
300
1,500
1,800
300
5
30
4
300
1,200
1,800
600
6
33
3
300
900
1,800
900
a. The firm is a price taker.
this because the product price given in the table is constant and does not depend on the quantity being sold.
Number of Workers
Output of Televisions per Week
Marginal Product of Labor (television sets per week)
Product Price
Marginal Revenue Product of Labor (dollars per week)
Wage (dollars per week)
Additional Profit from Hiring One More Worker (dollars per week)
L
Q
MP
P
MRP =
P x MP
W
MRP W
0
0
$300
$1,800
1
8
8
300
$2,400
1,800
$600
2
15
7
300
2,100
1,800
300
3
21
6
300
1,800
1,800
0
4
26
5
300
1,500
1,800
300
5
30
4
300
1,200
1,800
600
6
33
3
300
900
1,800
900
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