Economics

2. Consider a price-taking rm that has total xed cost of $750 and faces a market-determined price of $10 per unit for its output. The wage rate is $110 per unit of labor, the only variable input. Using the following table, answer the questions below. a. s: 9 Q9 (1) (2) (3) (4) (5) (6) Marginal Units of Marginal revenue Marginal labor Output product product cost Profit 10 30 60 100 135 165 190 210 225 235 tom'le'JU'I-kwML .5 0 Fill in the blanks in column 3 of the table by computing the marginal product of labor for each level of labor usage. Fill in the blanks in column 4 of the table by computing the marginal revenue product for each level of labor usage. How much labor should the manager hire to maximize prot? Why? Fill in the blanks in column 5 of the table by computing marginal cost. How many units of output should the manager produce to maximize prot? Why? Fill in the blanks in column 6 with the prot earned at each level of labor usage. Do your answers to parts c and e maximize prot? Does it matter whether the manager chooses labor usage or chooses output to maximize prot? Why? How much labor should the manager hire when the wage rate is $195? How much prot is earned? Is marginal product greater or less than average product at this level of labor usage? Why does it matter