The firm’s profit maximizing rule in determining how many workers to hire. Concept Introduction: Profit Maximization: It is the ability of a business to achieve the highest level of profits within a short period of time with low operating expenses. Profit maximizing is achieved when a firm operates where the marginal revenue is equal to the marginal cost.

Question

(TCO C) You have been hiredto manage a small manufacturing facility whose cost and productiondata are given in the table below.No. of workers Total LaborCost Output TotalRevenue 1 $150 100 $170 2 300 108 550 3 450 114 1150 4 600 119 1470 5 750 123 1600 6 900 125 1700 7 1050 126 1750 What is the marginal product of the secondworker?

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Question

Chapter 11, Problem 2P

To determine

The firm’s profit maximizing rule in determining how many workers to hire.

Concept Introduction:

Profit Maximization: It is the ability of a business to achieve the highest level of profits within a short period of time with low operating expenses. Profit maximizing is achieved when a firm operates where the marginal revenue is equal to the marginal cost.

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(TCO C) You have been hiredto manage a small manufacturing facility whose cost and productiondata are given in the table below.No. of workers Total LaborCost Output TotalRevenue 1 $150 100 $170 2 300 108 550 3 450 114 1150 4 600 119 1470 5 750 123 1600 6 900 125 1700 7 1050 126 1750 What is the marginal product of the secondworker?

It is easy to conclude that when hiring workers in the short run whose marginal. productivity rises, the average product of labor will rise as well. However, if workers productivity declines, average product of labor may still be rising. Explain why this may happen. (:

(a) The table below shows the relationship between number of workers hired and output. Total Total Marginal Marginal Price Labour Product (unit) Revenue Revenue Product (RM) (RM) Product 20 1 50 20 2 90 20 3 20 600 4 20 400 20 200 155 20 Complete the table.