Would it be better to operate with 15 workers

Reference no: EM131130115

Advice for an Unprofitable Firm. You ve been hired as an economic consultant by a price-taking firm that produces baseball caps. The firm already has a factory, so it is operating in the short run. The price of caps is $5, the hourly wage is $12, and each cap requires $1 worth of material. The firm has experimented with different workforces and the results are shown in the first two columns of the following table.

a. Fill in the blanks in the table.

b. Is it sensible to continue to operate at a loss with 14 workers?

c. Would it be better to operate with 15 workers? Explain, using the marginal principle.

Reference no: EM131130115

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