Use the following information to answer the questions that follow.
Nicky L,owner of NLD Incorporated,knows that the marginal product of labor (MPL)for his workers can be defined as follows:
MPL = 32 - L
The total output a given level of workers can produce is found as:
Q = 32L - L 2
He also knows that the price of his output is $3.His profits can be found as:
Profit = P
Q - W
L
-The King Kupcake firm's worker productivity is presented in the accompanying table.When King Kupcake hires its 300th worker,what is that worker's marginal product of labor?
A)300 cupcakes
B)200 cupcakes
C)100 cupcakes
D)2 cupcakes
E)3 cupcakes

Question

Use the following information to answer the questions that follow.
Nicky L,owner of NLD Incorporated,knows that the marginal product of labor (MPL)for his workers can be defined as follows:
MPL = 32 - L
The total output a given level of workers can produce is found as:
Q = 32L - L 2 
He also knows that the price of his output is $3.His profits can be found as:
Profit = P
  Q - W
  L
-The King Kupcake firm's worker productivity is presented in the accompanying table.When King Kupcake hires its 300th worker,what is that worker's marginal product of labor? 
A)300 cupcakes 
B)200 cupcakes 
C)100 cupcakes 
D)2 cupcakes 
E)3 cupcakes

Quizplus · Accepted Answer

The marginal product of labor for the 300th worker can be found by plugging L=300 into the MPL equation: MPL = 32 - L = 32 - 300 = -268. This means that the 300th worker actually reduces production by 268 cupcakes. Therefore, the best choice is not to hire the 300th worker as it would decrease total output and profits.

Use the Following Information to Answer the Questions That Follow