Answer to Question #174731 in Microeconomics for jasmine

Question

Suppose that labor is the only input used by perfectly competitive firm. The firm’s production function is as follows:

Days of Labour

1

2

3

4

5

6

7

Output

7

13

19

25

28

29

29

i. Calculate the marginal product for each additional worker.

ii. Each unit of output sells for $10. Calculate the value of the marginal product of each worker.

iii. Compute the demand schedule and firms demand curve showing the number of workers hired for all wages from 0 to $100 a day.

Answer 1

A. B.

L Q MR MRP

0 0 - -

1 7 7 70

2 13 6 60

3 19 6 60

4 25 6 60

5 28 3 30

6 29 1 10

7 29 0 0

C. The demand schedule (for labor) for all wage levels from zero to $100 per day will be decreasing.