Question
Suppose that a firm is currently employing 20 workers, the only variable input, at a wage rate of $60. The average product of labor is
Suppose that a firm is currently employing 20 workers, the only variable input, at a wage rate of $60. The average product of labor is 30, the last worker added 12 units to total output, and total fixed cost is $3,600.
output = 600
TVC = 1200
AVC = 2
Total cost = 4800
ATC = 8
MC = 5
Consider that the market price is $7.00. Is the firm currently producing at its profit-maximizing level of output?
What is the value of the firm's marginal product of labor?
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The Economics of Women Men and Work
Authors: Francine D. Blau, Marianne A. Ferber, Anne E. Winkler
7th edition
978-0190670863, 019067086X, 132992817, 978-0132992817
