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The following table depicts the output of a firm that manufactures computer printers. The printers sell for $100 each.
Labor input(workers per week) Total physical output (printers per week)
10 200
11 218
12 234
13 248
14 260
15 270
16 278
a) Calculate the marginal physical product and marginal revenue product at each input level above 10 units.
b) What is the maximum wage the firm will be willing to pay if it hires 15 workers?
c) The weekly wage paid by computer printer manufacturers in a perfectly competitive market is $1,200. How many workers will the profit-maximizing employer hire?
d) Suppose that there is an increase in the demand for personal computer systems. Explain the likely effects on marginal revenue product, marginal factor cost, and the number of workers hired by the firm.
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