You've been hired as the manager of a firm producing a certain product X. The following...
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You've been hired as the manager of a firm producing a certain product X. The following schedule shows the total production per week of product X. Additionally, assume each unit of product X sells for $10 per unit, workers can be hired in a competitive labor market for $100 per week, and each unit of capital costs $125 per week. Labor (L) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Capital (K) 5 5 5 in 5 in 5 in 5 5 5 in 5 5 5 5 5 5 5 5 Quantity (Q) 15 31 51 73 98 124 4. What will be your firm's weekly profit? Explain your answer! 154 178 198 213 223 232 240 247 253 1. How much value marginal product (VMPL) does the 4th worker bring to the firm? Explain! 2. State the principle of profit-maximizing input usage including the exact wording. [from your textbook]. - To maximize profits, use input levels at which marginal benefit equals marginal cost When the cost of each additional unit of labor is W, the manager should continue to employ labor up to the point where VMPL = W in the range of diminishing marginal oproduct 3. How many workers should be hired? To answer this question, append to the above table three new columns similar to columns (3), (4) and (5) of Table 5-2 in your textbook. Explain your final answer! You've been hired as the manager of a firm producing a certain product X. The following schedule shows the total production per week of product X. Additionally, assume each unit of product X sells for $10 per unit, workers can be hired in a competitive labor market for $100 per week, and each unit of capital costs $125 per week. Labor (L) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Capital (K) 5 5 5 in 5 in 5 in 5 5 5 in 5 5 5 5 5 5 5 5 Quantity (Q) 15 31 51 73 98 124 4. What will be your firm's weekly profit? Explain your answer! 154 178 198 213 223 232 240 247 253 1. How much value marginal product (VMPL) does the 4th worker bring to the firm? Explain! 2. State the principle of profit-maximizing input usage including the exact wording. [from your textbook]. - To maximize profits, use input levels at which marginal benefit equals marginal cost When the cost of each additional unit of labor is W, the manager should continue to employ labor up to the point where VMPL = W in the range of diminishing marginal oproduct 3. How many workers should be hired? To answer this question, append to the above table three new columns similar to columns (3), (4) and (5) of Table 5-2 in your textbook. Explain your final answer!
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Answer rating: 100% (QA)
Answers to your questions 1 VMP Marginal Product of the 4th worker VMP Q L 73 51 22 units The 4th wo... View the full answer
Related Book For
Management Accounting
ISBN: 978-0132570848
6th Canadian edition
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu
Posted Date:
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