The table below shows the short-run production function for Mateo's Metalworks. Number of Welders 1 2 3 4 5 6 7 8 Total Product per Hour 5 11 16 20 23 25 26 25 (a) Beginning with which welder do diminishing marginal returns set in for Mateo's Metalworks? Explain using numbers. (b) Assume Mateo's Metalworks sells its welding services in a perfectly competitive market at a unit price of $10. Calculate the marginal revenue product of the seventh welder. Show your work. (c) Mateo's Metalworks hires welders in a perfectly competitive labor market for welders at a wage rate of $35 per hour, and the market price of welding services remains $10. How many welders will Mateo's Metalworks hire to maximize its profit? Explain using marginal analysis.
The table below shows the short-run production function for Mateo's Metalworks. Number of Welders 1 2 3 4 5 6 7 8 Total Product per Hour 5 11 16 20 23 25 26 25 (a) Beginning with which welder do diminishing marginal returns set in for Mateo's Metalworks? Explain using numbers. (b) Assume Mateo's Metalworks sells its welding services in a perfectly competitive market at a unit price of $10. Calculate the marginal revenue product of the seventh welder. Show your work. (c) Mateo's Metalworks hires welders in a perfectly competitive labor market for welders at a wage rate of $35 per hour, and the market price of welding services remains $10. How many welders will Mateo's Metalworks hire to maximize its profit? Explain using marginal analysis.
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter4: Extent (how Much) Decisions
Section: Chapter Questions
Problem 3MC
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