Question 5: The Eastern Company pays each worker it employs a wage of AED 600. Each unit of output is sold at a price of AED 10. Answer the following questions:
A. Fill in the empty cells in the table. (0.5x12= 6 marks)
Number of workers |
Total Output |
Marginal Product of Labor (MPL) |
Value of Marginal Product of Labor VMPL = P x MPL |
Wage per Worker W |
Profit Margin (PM)PM=VMPL-Wage |
0 |
0 |
- |
- |
- |
- |
1 |
140 |
140 |
800 |
||
2 |
260 |
120 |
800 |
||
3 |
360 |
100 |
800 |
||
4 |
440 |
80 |
800 |
||
5 |
500 |
60 |
800 |
||
6 |
540 |
40 |
800 |
B. State the condition that the firm should meet to maximize his profit.
………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………C. How many workers should this firm employ to maximize his profits?
Get Answers For Free
Most questions answered within 1 hours.