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Bobby's Bakehouse is the only bakery in a small remote town, and Bobby's Bakehouse is the only employer of bakers in the area. The graph below shows the market for bakers with the marginal factor (resource) cost curve, the labor supply curve, and the marginal revenue product curve. @ 40 Marginal Factor Cost Wage Rate Supply Marginal Revenue Product 0 Quantity 90 160 of Bakers (a) If the wage rate is 313, state whether there will be a shortage or a surplus of bakers and calculate its size. Show your work. (b) Identify the prot-maximizing number of bakers that Bobby's Bakehouse will hire. Explain using the labeling on the graph. (0) Identify the prot-maximizing wage rate that Bobby's Bakehouse will pay its bakers. Explain using the labeling on the graph. (d) If the marginal product of bakers increases, what will happen to the quantity of output produced by Bobby's Bakehouse? Explain. (e) Assume instead that Bobby's Bakehouse uses both labor and capital in its production of baked goods. The marginal product of the last unit of labor hired is 16 baked goods per hour and the marginal product of the last unit of capital rented is 50 baked goods per hour; the hourly wage rate for labor is $8 and the hourly rental price for capital is 35. To minimize the cost of producing its current level of output, should Bobby's Bakehouse rent more capital, less capital, or the same amount of capital? Explain using marginal analysis