Application of diminishing marginal return

Reference no: EM1312468

Suppose you are running a photo copy center that makes illegal copies of the textbook. An illegal copy of the book sells for $10 and you only have one copy machine. The relationship between workers and output is as follows:

Number of Workers	Number of Book Copies Made	Marginal Product of Labor	Marginal Revenue Product (MRP)	ME(L)
0	0	-	-	-
1	8	8	80	50
2	20	12	120	50
3	28	8	80	50
4	34	6	60	50
5	38	4	40	50
6	40	2	20	50

Do copy machine operators exhibit diminishing marginal return? If so name a factor that might be generating the diminishing marginal returns.

If copy machine operators earn $50 an hour (it's a boring job so they need to be compensated for it) how many workers should you hire?

Reference no: EM1312468

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