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From this assignment, you should learn the concepts of marginal product, marginal revenue product, and derived demand. Congratulations! You've secured a job with Broadus Corp.,

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From this assignment, you should learn the concepts of marginal product, marginal revenue product, and derived demand. Congratulations! You've secured a job with Broadus Corp., a manufacturer of sunglasses. There are two scenarios in this assignment, representing two different assumptions about the pricing power of your company. In the first scenario, the company is a relatively small producer producing a relatively generic sunglass. You can reasonably expect to increase production without affecting the market price for the sunglasses. In the second scenario, your product is branded, with some buyers having a preference for your sunglasses. To sell more in the second scenario, you must lower the price. First scenario: output price is given The table [below] gives the total output, per hour, for anywhere from O to 17 workers. Your task is to determine how many workers to hire at five different wage rates, ranging from $90lday up to $250/day. The wage rate includes all relevant benefits. To get to this answer you will need to calculate the marginal product of labor and the marginal revenue product of labor. You will be entering the values you obtain for the boldy outlined celles into the Moodle submission area. Cost of the other [non-labor] inputs that go into a pair of sunglasses [and would need to be increased if more labor was hired and output increased] = $45.00 Price received per pair of sunglasses = $54.00 Marginal product of labor is the change in total product when labor is increased by one. Marginal Revenue Product (net of the cost of the other required inputs), when the output price is fixed) equals marginal product times the ((fixed) output price -$12) Please note: A few of the table values are filled in. Use these to determine if your approach to the problem is correct. Marginal Revenue Product (net of the cost Marginal product of of the other required Number of workers Total product labor inputs) 0 12 261 14 $266.00 17 $323.00 1... 62 I.... 19 $361.00 83 21 $399.00 103 20 $380.00 122 19 $361.00 8 140 18 $342.00 9 157 17 6323.00 10 172 15 5285.00 11 185 13 $247.00 12 196 11 $209.00 13 205 9 $171.00 14 217 7 $133.00 15 217 5 $95.00 16 219 2 538.00 17 219 E.... 0 50.00Using the information from above, fill in the following 'derived demand' schedule: Number of workers to Daily wage maximize profits $90.00 $130.00 $170.00 $210.00 $250.00

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