Question: Annetta operates a soft drink stand that sells soft drinks at the County Fair in Googleland. The price of a soft drink is $3.00 each.

Annetta operates a soft drink stand that sells soft drinks at the County Fair in Googleland. The price of a soft drink is $3.00 each. The number of soft drinks sold varies with the amount of labor hired as follows:

Total Labor Total Product (Soft drinks per day) Marginal Marginal Units Total

(a) Fill in the columns for total revenue, marginal product of labor and marginal revenue product. Show your calculations.

(b) If the wage for an employee is $40 per day, how many employees should Annetta employ?

Total Labor Total Product (Soft drinks per day) Marginal Marginal Units Total Product of Revenue (employees) Revenue Labor Product 0. 25 2. 45 3 63 4 77 88

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