Assignment 6

Please help me solve this assignment base on this scenario.

scenario 1.

You work for a company that produces plastic protective cases for smartphones. In the first scenario, you are a relatively small producer producing a relatively generic case. You can reasonably expect to increase production without affecting the market price for the cases. In the second scenario, your product is unique on the market. To sell more, you will have to lower the price.

First scenario: output price is given

The table (below) gives the total output, per hour, for anywhere from 0 to 17 workers.

You need to determine how many workers should be hired at five different wage rates, ranging from $13/hour up to $25/hour. The wage rate includes all relevant benefits. To get to this answer "I" will need to calculate the marginal product of labor and the marginal revenue product of labor.

Cost of the other (non-labor) inputs that go into a case (and would need to be increased if more labor was hired and output increased) = $13.00

Price received per case = $15.00

Marginal product of labor is the change in total product when labor is increased by one.

Marginal Revenue Product (net of the cost of the other required inputs), when the output price is fixed) equals marginal product times the ((fixed) output price -$13)

Number of workers Total product

0 0

1 10

2 21

3 33

4 46

5 60

6 75

7 91

8 106

9 120

10 133

11 145

12 156

13 165

14 172

15 177

16 179

17 179

find:

Marginal product of labor

Marginal Revenue Product (net of the cost of the other required inputs)

Using the information from above, fill in the following 'derived demand' schedule:

Hourly wage Number of workers to maximize profits

$13.00

$17.00

$21.00

$23.00

$25.00