Question

Gopher Excavators produces shovels in a small factory and sells the shovels in a competitive market. The following table shows the company's production function: Labor (Number of workers) 0 Output (Shovels) 0 90 2. 175 3 245 4 300 325 S Use the blue points (circle symbol) to plot the production function for Gopher Excavators on the following graph. .

Answer 1

Labor	Output	MPL	VMPL	VMPL
Number of workers	Shovels		when price is $0.50 per shovel.	when price is $1.50 per shovel.
0	0	-
1	90	90	45	135
2	175	85	42.5	127.5
3	245	70	35	105
4	300	55	27.5	82.5
5	325	25	12.5	37.5
VMPL= MPL x price of shovel
Line O
Line M
Since VMPl ( MPL times price) determines the demand for labor.
Wages = VMPL for optimum quantity of labor to be hired.

Labor Number of workers Output Shovels 0 0 1 90 2 175 3 245 300 4 5 325 Production Function 400 360 Output (Shovels) 320 280 240 200 160 120 80 40 0 0 1 2 3 4 5 6 Number of workers

MPL Labor Number of workers Output Shovels 0 0 1 90 90 175 85 2 3 245 70 4 300 55 5 325 25 MPL 100 90 Labor 90 MPL 0.5 1.5 2.5 3.5 4.5 80 70 60 85 70 MPL( Shovels per worker) 50 55 40 25 30 20 10 0 0 3 4 5 Labor ( Number of workers)