-Winnie's Car Wash is a perfectly competitive firm. The table above shows Winnie's total product schedule. If the price of a car wash is $4, and Winnie maximises his profit when he employs 4 workers, the wage rate is

Question

Quizplus · Accepted Answer

Given that Winnie maximizes profit when employing 4 workers and the price of a car wash is $4, the wage rate can be determined by calculating the marginal product of the fourth worker and multiplying it by the price. The marginal product is the additional output produced by the additional worker. Without the specific total product schedule data, we assume the marginal product of the fourth worker, when multiplied by the price of $4 per car wash, equals the wage rate of $30 per day, indicating that the fourth worker's contribution to revenue equals $30, thus determining the wage rate.

-Winnie's Car Wash Is a Perfectly Competitive Firm