Tessa's Techs is a small, competitive firm that provides online and telephone support for people with computer
Question:
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a. If Tessa's charges $6 for each service call, calculate the marginal revenue product of labor for Tessa's Techs.
b. Suppose Tessa can hire workers for $60 per four-hour shift. Explain why, if Tessa currently has just one employee, she isn't maximizing her profits. How much will her profits increase if she hires a second worker?
c. Suppose Tessa can hire workers for $60 per four-hour shift. Explain why, if Tessa hires five employees, she isn't maximizing her profits.
d. Determine the optimal number of employees for Tessa to hire.
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a Units of Labor MP l MRPl 1 14 84 2 12 72 3 10 60 4 8 48 5 6 36 b The marginal revenue produ...View the full answer
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Related Book For 
Microeconomics
ISBN: 978-1464187025
2nd edition
Authors: Austan Goolsbee, Steven Levitt, Chad Syverson
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