1. (20 points). 1. Standale Plastics produces plastic dustpans, using a semi-automated system of five machines to produce pans. The amount of labor to tend the machines, repair, adjust input flows, and remove completed pans, is variable, and output tends to follow the formula: Q = 300L , where Q = units of output produced per day and L = number of daily workers. (a) Compute the total product per day and the marginal product of labor for the first five workers. Q=300L 0.6 MPL=dQ/dL=180L-04 Q MPL 1 300(1).=300 180(1)-4=180 2 300(2) 06=455 180(2)-04=136.4 3 300(3) 06=580 180(3)-04=116 4 300(4) 0.6=689 180(4)-0.4=103.4 5 300(5) 06=788 180(5)-04=94.6 (b) Standale sells the dustpans to retailers at a price of $1 each and can hire labor at a wage of $125 per day. What is the optimal amount of labor to hire? What is the optimal output of dustpans? MR*MPL=MCL Price is $1, so $1*MPL=$125 At 2 workers the MPL=136.4, and at 3 workers MPL=116, therefore the firm should hire 2 workers because MPL of 3 workers is less than $125. The optimal output is 455 dustpans