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John operates a bakery and his production function per week is given in the table below. The current equilibrium weekly wage in the labor market
John operates a bakery and his production function per week is given in the table below. The current equilibrium weekly wage in the labor market is $400 per week and his fixed costs are equal to $300 per week. John sells each cake produced at his bakery for $10.
Quantity of Labor (workers) | Quantity of cakes |
0 | 0 |
2 | 200 |
4 | 350 |
6 | 450 |
8 | 500 |
a. Find the marginal product of labor for each worker (2 points)
Quantity of Labor (workers) | Marginal product of labor (cakes per worker) | VMPL |
0 | ||
2 | ||
4 | ||
6 | ||
8 |
Find the revenue, marginal revenue, total cost, and marginal cost for each quantity of cakes given in the table. (4 points)
Quantity of cakes | Revenue | MR | Total Cost | Marginal Cost |
0 | ||||
200 | ||||
350 | ||||
450 | ||||
500 |
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