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Recall the production function, to maximize profit, a producer should make sure that the real wage of a worker should be equal to his or

Recall the production function, to maximize profit, a producer should make sure that the real wage of a worker should be equal to his or her marginal product of labor (MPL).

Number of labor Total output /h Number of labor Total output

1 10 pizzas 4 29 pizzas

2 18 pizzas 5 32 pizzas

3 24 pizzas 6 30 pizzas

Suppose the MPL of workers in a pizza shop as above. The table shows the total output of pizzas made per hour by the number of labor used as input. If the net price (excluding material costs) of a pizza is $3.00. And the nominal wage of a worker is $18.00 per hour. Then how many workers should be employed per hour. Please follow the decision of this firm and use the formula to show your result step-by-step.

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