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Suppose that the wage rate is $30 per hour, and the firm sells each unit of output for $6. Using the data from Table 7.3, how many units of labor will the firm hire? a.2 units b.3 units c.4 units d.5 units
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Feb 12, 2018
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Suppose that the wage rate is $30 per hour, and the firm sells each unit of output for $6. Using the data from Table 7.3, how many units of labor will the firm hire?
a.2 units
b.3 units
c.4 units
d.5 units
3 unite is incorrect!
Business
high-school
Jonathan Vanasco
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Jonathan Vanasco
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I found this data from Table 7.3
Labor Input Output
0 0
1 40
2 70
3 90
4 100
5 105
6 108
Labor Cost = Labor Input x 30
Output Sales = Output x 6
Revenue = Sales - Cost
Labor cost Output Sales
0 0
30 240
60 420
90 540
120 600
150 630
180 648
Labor Input Output Labor cost Output Sales
Revenue
0 0 0 0 0
1 40 30 240 210
2 70 60 420 360
3 90 90 540 450
4 100 120 600 480
5 105 150 630 480
6 108 180 648 468
Labor Unit 4 and 5 both have a revenue of 480. It is the maximum revenue. I think the best option would be C. 4 UNITS.
Lesser cost to the company at a maximum revenue.
HigoChumbo
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Feb 17, 2018
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HigoChumbo
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