If this profit-maximizing firm sells its output in a competitive market for $3 per unit and hires...

Question

If this profit-maximizing firm sells its output in a competitive market for $3 per unit and hires labor in a competitive market for $8 per hour, then this firm should hire

a. one worker.

b. two workers.

c. three workers.

d. four workers.

e. five workers.

Robert · Accepted Answer

Labour 
(number 
of 
workers) 
Output 
per 
hour 
Marginal 
Product 
of 
Labour 
Value of 
Marginal 
Labour = 
MPL *3 
0 0     
1 5 5 15 
2 9 4 12 
3 12 3 9 
4 14 2 6 
5 15 1 3

If this profit-maximizing firm sells its output in a competitive market for $3 per unit and hires labor in a competitive market for $8 per hour, then this firm should hire a. one worker. b. two...

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