-Based on the production and revenue data in the above table, if the wage rate is $35 per worker, how many workers will be hired?
A) 2
B) 3
C) 5
D) 4

Question

-Based on the production and revenue data in the above table, if the wage rate is $35 per worker, how many workers will be hired?
A) 2 
B) 3 
C) 5 
D) 4

Quizplus · Accepted Answer

The correct answer can be determined by analyzing the marginal product of labor and the wage rate. Without specific production and revenue data from the table, the general principle is that firms hire workers up to the point where the marginal revenue product (MRP) of labor equals the wage rate. MRP is calculated as the marginal product of labor (additional output produced by an additional worker) multiplied by the price of the output. If the wage rate is $35, the firm will hire workers until the additional revenue generated by hiring an extra worker is just about equal to $35. Without the specific data, we can't calculate the exact number, but the correct answer is chosen based on the information provided in the question.

-Based on the Production and Revenue Data in the Above