If the price of a milk shake rises to $5, how many workers will Kaiser’s hire?
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