a market price of $2 per dozen and can hire all the workers it needs at...

 

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a market price of $2 per dozen and can hire all the workers it needs at a wage rate of $8 per hour. The output of the Leadmill Company is a perfectly competitive pencil-manufacturing firm. Leadmill can sell all of the pencils it produces at workers at Leadmill is given in the table below. Number of Workers 0123 8677AWN-0 3 4 5 6 7 Output (dozens) 0 8 SZER338 15 21 26 30 35 36 a. Using marginal analysis, state the condition for employing the profit-maximizing number of workers. b. How many workers should Leadmill hire to maximize profit? Explain how you derived that number. c. If the wage rate decreased to $6 dollars per hour, how many workers would Leadmill employ? d. If the wage rate was $6 per hour and the price of pencils decreased to $1 per dozen, how many workers would Leadmill employ? a market price of $2 per dozen and can hire all the workers it needs at a wage rate of $8 per hour. The output of the Leadmill Company is a perfectly competitive pencil-manufacturing firm. Leadmill can sell all of the pencils it produces at workers at Leadmill is given in the table below. Number of Workers 0123 8677AWN-0 3 4 5 6 7 Output (dozens) 0 8 SZER338 15 21 26 30 35 36 a. Using marginal analysis, state the condition for employing the profit-maximizing number of workers. b. How many workers should Leadmill hire to maximize profit? Explain how you derived that number. c. If the wage rate decreased to $6 dollars per hour, how many workers would Leadmill employ? d. If the wage rate was $6 per hour and the price of pencils decreased to $1 per dozen, how many workers would Leadmill employ?

Answer rating: 100% (QA)

a To determine the profitmaximizing number of workers Leadmill should compare the marginal revenue product MRP of labor with the wage rate w The MRP i... View the full answer