1. P & L is a profit-maximizing shirt-manufacturing firm. The firm can sell all the shirts it can produce to retailers at a price of $20 each. P & L can hire all of the workers it wants at a market wage of $120 per day per worker. The table below shows the firm's short-run production function. Number of Number of Workers Shirts per Day 0 0 10 25 45 4 60 72 80 85 82 (a) In what kind of market structure does this firm sell its output? How can you tell? (b) In what kind of market structure does this firm hire its workers? How can you tell? (c) Calculate the marginal revenue product of the third worker. Show your work. (d) How many workers should the firm hire to maximize profit? Explain. . Petsall Corporation is a profit-maximizing monopolist. It sells a patented rabies vaccine for pets and earns economic profits. (a) Draw a correctly labeled graph that shows each of the following for Petsall. (i) Output and price of the vaccine (ii) Area of economic profits (b) Assume that Petsall hires its production workers in a perfectly competitive labor market at the wage rate of $20 per hour. (i) State the marginal conditions for hiring the profit-maximizing amount of labor. (ii) Draw a correctly labeled graph that shows the labor supply and demand curves for Petsall and indicate the profit-maximizing quantity of labor. (c) Suppose that the market wage rate now falls to $15 per hour. Show on your diagram in (b) (ii) how each of the following would be affected. (i) The supply of labor to Petsall (ii) The amount of labor Petsall would hire (d) Given the lower wage rate in (c), indicate how each of the following would change. (i) Total fixed cost (ii) Marginal cost (iii) Price of the product