Answer to Question #220224 in Microeconomics for Khushi Mittal

Question

) You are given the following schedule for the production of pens by a firm
Labor Total Product
0 0
1 20
2 50
3 70
4 80
5 85
6 82
If pen sells for Rs 3 per unit and workers can be hired in a competitive labor market for Rs30
per day, how many workers should be hired? Explain your answers clearly.

Answer 1

If the aim is revenue maximization , then number of labour to be employed is upto the point where the marginal product becomes negative. So, ie 5 workers.