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Prairie Cabinets produces and sells custom kitchen cabinets. The firm has determined that if it hires 10 workers, it can produce 10 sets of cabinets
Prairie Cabinets produces and sells custom kitchen cabinets. The firm has determined that if it hires 10 workers, it can produce 10 sets of cabinets per day. If it hires 11 workers, it can produce 12 sets of cabinets per day. It sells each set of cabinets for $2,000, and it pays each of its workers $200 per day. Which of the following is correct? a. For the 11th worker, the value of the marginal product of labor is $400. b. For the 11th worker, the value of the marginal product of labor is $4,000. c. In order to justify hiring the 11th worker the firm will need to raise the price of a set of cabinets. d. The firm should not hire the 11th worker since hiring this worker reduces profit
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