Patty's Pizza Parlor has the production function per hour shown in the accompanying table. The hourly wage rate for each worker is $10. Each pizza sells for $2.
Quantity of labor
(workers) Quantity of pizza
0………………………….. 0
1………………………….. 9
2………………………….. 15
3………………………….. 19
4………………………….. 22
5………………………….. 24
a. Calculate the marginal product of labor for each worker and the value of the marginal product of labor per worker.
b. Draw the value of the marginal product of labor curve. Use your diagram to determine how many workers Patty should employ.
c. Now the price of pizza increases to $4. Calculate the value of the marginal product of labor per worker, and draw the new value of the marginal product of labor curve in your diagram. Use your diagram to determine how many workers Patty should employ now.