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Suppose that Brine Freez servings sell for $4 each; capital is paid a daily interest rate of $20; and labor is paid a daily wage
- Suppose that Brine Freez servings sell for $4 each; capital is paid a daily interest rate of $20; and labor is paid a daily wage of $80.
- (10) Calculate the value of marginal product of labor (L) and show in its simplest form.
- (10) Calculate the value of marginal product of labor (L) and show in its simplest form.
- (10) Interpret the value of marginal product of labor (L) when L=3 in your own words?
- (10) What is the predicted profit-maximizing number of workers (L*) for Brine Freez?
- (5) What is the predicted output of servings (Q*) that results from hiring this number of workers?
- Discuss the profit-maximizing number of workers (L*).
- (5) What is the value of marginal product of labor at the profit-maximizing number of workers?
- (7) Compare the VMP(L) at the profit-maximizing number of workers with the VMP(L) that you calculated for L=3 in 3(b). What difference would hiring the 3rd worker make to profits as compared to hiring the last worker at the profit-maximizing labor level?
- (8) What would be the effect on profits of employing the output-maximizing number of workers instead of the profit-maximizing number of workers? (Hint: Include all costs.)
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Financial and Managerial Accounting the basis for business decisions
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
16th edition
978-0078111044
