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Chapter 28: Q. 1 - Problems (page 645)

The following table depicts the output of a firm that manufactures computer printers. The printers sell for $100each.

Calculate the marginal product and marginal revenue product at each input level above 10 units.

Short Answer

Expert verified

The price into MPP is equal to the marginal revenue product. The printer costs 5100 per unit in this country.

Step by step solution

01

Given information 

That are given sentences are (a).

The above table Marginal Physical Product (MPP) and Marginal Revenue Product (MRP)

02

Step 2:Explanation (1)

The following table represents the output of a firm that manufactures computer printers. We have calculated marginal physical product and marginal revenue product

The Laber Input is represented in the table above. Physical Output in Total MPP (Marginal Physical Product) and MRP (Marginal Revenue Product) (MRP)

03

Given information 

That are given sentences are :(2)

Product is equal to the price into MPPMPP

04

Explanation (2) 

The change in total physical output divided by the change in labour input yields the marginal physical product. The price in MPP is equal to the marginal revenue product. The printer costs 5100 per unit in this country.

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Most popular questions from this chapter

Consider Figure 28-7. Suppose that the monopolist is contemplating hiring 14 units of labor, which it knows would cause the marginal product to decline to 150 units of output per unit of labor. The product price also decreases to \(4.50 per unit, and the firm's marginal revenue declines to \)3.20 per unit. What would be the firm's marginal revenue product if it hires a 14th unit of labor?

Consider Figure 28-1, and suppose that the firm is contemplating 14 units of labor, and it knows that doing so would cause its total production to increase to 4,075 units. What would be the resulting marginal product of the 14th unit of labor employed?

Understand why a firm's marginal revenue product curve is its labor demand curve.

Refer back to your answers to Problem 28-1 in answering the following questions.

a. What is the maximum wage the firm will be willing to pay if it hires 15 workers?

b. The weekly wage paid by computer printer manufacturers in a perfectly competitive market is $1200. How many workers will the profit-maximizing employer hire?

c. Suppose that there is an increase in the demand for printed digital photos. Explain the likely effects on marginal revenue product, marginal factor cost, and the number of workers hired by the firm?

Recently, Swedish companies have outsourced manufacturing labor previously performed by Swedish workers at \(20 per hour to U.S. workers who receive a wage rate of \)10 per hour. Evaluate the effects of Swedish manufacturing-labor outsourcing on Swedish and U.S. employment levels and wages.
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