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Sunshine's Organic Market Sells Organic Produce

Question 352

Multiple Choice

Sunshine's Organic Market sells organic produce. Assume that labor is the only input that varies for the firm. The store manager has determined that if she hires 5 workers, the store can sell 150 pounds of produce per day. If she hires 6 workers, the store can sell 170 pounds of produce per day. The store earns $4 for each pound of produce that it sells, and the manager pays each worker $60 per day. Which of the following is not correct?


A) For the 6th worker, the marginal product is 20 pounds of produce per day.
B) For the 6th worker, the marginal revenue product is $20 per day.
C) The store earns a higher profit by employing 6 workers than by employing 5 workers.
D) Assuming no changes in either the daily wages paid to store workers or the price at which the store sells its produce, the firm would maximize profits by hiring a 7th worker so long as the store can increase its sales to at least 185 pounds per day.

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