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|Workers||Output (Bushels)||Marginal Product of labor (MPL)||Value of marginal product of labor (VMPL)|
MPL = change in Output / change in workers
VMPL = MPL * Price of output.
A firm will hire the workers till VMPL is higher than the wage rate or VMPL = Wage rate.
We can see that till 4 units of worker, VMPL is higher than wage rate of $3000.
It means firm should hire 4 workers.
TR = Price * output
TC = wage * number of workers.
Profit = TR - TC
we can see that at 4 units of worker the profit is maximum.
hence farm should hire 4 workers.
Answer: 4 workers
Labor demand Homework. Unanswered Consider the following data taken from a Florida orange grove (farm) where...