The Zippy Paper Company has no control over either the price of paper or the wage it
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The Zippy Paper Company has no control over either the price of paper or the wage it pays its workers. The following table shows the relationship between the number of workers Zippy hires, total output, marginal product, and marginal revenue product of labor, with all other inputs being held constant. Assume that the selling price is $10 per box of paper.
Labor Input | Total Output | Marginal Product | Marginal Revenue Product |
---|---|---|---|
(Workers per day) | (Boxes of paper per day) | (Boxes of paper per day) | Price = $10 |
(Dollars) | |||
0 | 0 | ||
15 | $150 | ||
1 | 15 | ||
12 | $120 | ||
2 | 27 | ||
9 | $90 | ||
3 | 36 | ||
7 | $70 | ||
4 | 43 | ||
5 | $50 | ||
5 | 48 | ||
3 | $30 | ||
6 | 51 | ||
If the wage rate is $60.00 per day, Zippy will hire ------ workers.
Suppose that the workers in this industry have unionized and have collectively bargained for a wage of $80.00.
As a result of this collective bargaining agreement, Zippy will ------ the number of workers it hires to hire ------workers.
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