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Question 5: The Eastern Company pays each worker it employs a wage of AED 600. Each...

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?                 

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