Consider the following information for a T-shirt manufacturing firm that can sell as many T-shirts as it wants for $3 per shirt. NUMBER OF NUMBER OF SHIRTS WORKERS PRODUCED PER DAY MP L TR MRP L 0 0...

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Consider the following information for a T-shirt manufacturing firm that can sell as many T-shirts as it wants for $3 per shirt.

NUMBER OF	NUMBER OF SHIRTS
WORKERS	PRODUCED PER DAY	MP_L	TR	MRP_L
0	0	__	__	__
1	30	__	__	__
2	80	__	__	__
3	110	__	__	__
4	135	__	__	__
5	__	20	__	__
6	170	__	__	__
7	__	__	__	30
8	__	__	__	15

a. Fill in all the blanks in the table.

b. Verify that MRPL for this firm can be calculated in two ways: (1) change in TR from adding another worker and (2) MPL times the price of output.

c. If this firm must pay a wage rate of $40 per worker per day, how many workers should it hire? Briefly explain why.

d. Suppose the wage rate rises to $50 per worker. How many workers should be hired now? Why?

e. Suppose the firm adopts a new technology that doubles output at each level of employment and the price of shirts remains at $3.What is the effect of this new technology on MPL and on MRPL? At a wage of $50, how many workers should the firm hire now?

Answered Same Day Dec 24, 2021

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David answered on Dec 24 2021

119 Votes

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Consider the following information for a T-shirt manufacturing firm that can sell as many T-shirts as it wants for $3 per shirt. NUMBER OF NUMBER OF SHIRTS WORKERS PRODUCED PER DAY MP L TR MRP L 0 0...

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