What is the marginal revenue product function for truckers

Reference no: EM131403455

U.S. logging companies employ Canadian loggers to cut Maine trees. When the federal government restricted the number of temporary workers permitted in the United States, the logging companies had to use fewer Canadian loggers. Unable to find U.S. workers willing to cut trees, the logging companies had to lay off workers in complementary operations- truck drivers, for example. Suppose that a logging company needs exactly one truck driver for each six loggers it employs. Each truck driver and team of six loggers can cut and transport 80,000 tons of wood per day. What is the marginal revenue product function for truckers, and how does the function depend on the number of loggers employed? Show that with a decrease in the number of loggers, a logging company would hire fewer truckers.

Reference no: EM131403455

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