scenario: output price must be reduced to sell a greater quantity of output.

The table below gives the total output, per day, for anywhere from 0 to 17 workers.

Cost of the other (non-labor) inputs that go into a case (and would need to be increased if more labor was hired and output increased) = $45

Price received per pair of sunglasses = Given in table below

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 changes, equals the change in total revenue (net of other input costs) from adding another worker. Calculate (P - $45)xtotal output. MRP is the change in this when another worker is added. Note that as you hire more workers, output increases and the price must fall to sell that increased quantity.

Please note: A few of the table values are filled in. Use these to determine if your approach to the problem is correct.

# of Workers Total Product Marginal Product of Labor Price per pair of sunglasses Marginal Revenue (net of the other req inputs)

0 0 $73.00

1 12 $72.50

2 26 14 $72.00

3 43 $71.50

4 62 $71.00

5 83 $70.50 $504.50

6 103 $70.00

7 122 $69.50

8 140 $69.00

9 157 $68.50

10 172 15 $68.00 $266.50

11 185 $67.50

12 196 $67.00

13 205 $66.50

14 212 $66.00

15 217 $65.50

16 219 $65.00

17 219 $64.50

Using the information from above, fill in the following 'derived demand' schedule:

Note: You are a worker if their MRP is greater than or equal to their wage rate

Daily Wage Number of workers to maximize profits

$90.00

$130

$170

$210

$250