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XYZ restaurant sells donuts at $2 per unit . It uses 5 units of capital and employs labor in the short run to increase production.

XYZ restaurant sells donuts at $2 per unit. It uses 5 units of capital and employs labor in the short run to increase production. Complete the following table and use that information to answer the following questions.

K

L

Q

MPL

VML

5

0

0

0

5

1

50

50

100

-----

2

125

-------

5

3

225

100

  1. What is the Marginal Product of Labor for the 2nd worker?

Explain

  1. What is the VMPL for the 2nd worker?

Explain.

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