Calculate the marginal product of hiring the fourth worker and the fourth worker’s value of marginal product
Kaiser’s Ice Cream Parlor hires workers to produce milk shakes. The market for milk shakes is perfectly competitive, and the price of a milk shake is $4. The labor market is competitive, and the wage rate is $40 a day. The table shows the workers’ total product schedule.
Number of workers Quantity produced
(milk shakes per day)
1…………………….. 7
2…………………….. 21
3…………………….. 33
4…………………….. 43
5…………………….. 51
6…………………….. 55