(Table: Workers and Corn Output) Laura is a price-taking farmer who produces corn.Assume the wage rate for workers is $250 and the price per bushel of corn is $20.The table Workers and Corn Output shows Laura's production function.Laura should hire workers to maximize
Profits.
A)one
B)two
C)four
D)seven

Question

Quizplus · Accepted Answer

To determine the optimal number of workers, Laura should choose the quantity that maximizes profits. To calculate profits, she should subtract total costs (wage rate * number of workers) from total revenue (price per bushel * quantity of corn produced).

Using this formula, we can calculate profits for each level of workers:
- 1 worker: (20*10)-(250*1) = $-230 (negative profit)
- 2 workers: (20*17)-(250*2) = $-106 (negative profit)
- 3 workers: (20*23)-(250*3) = $-41 (negative profit)
- 4 workers: (20*28)-(250*4) = $80 (positive profit)
- 5 workers: (20*32)-(250*5) = $90 (positive profit)
- 6 workers: (20*35)-(250*6) = $35 (positive profit)
- 7 workers: (20*37)-(250*7) = $-53 (negative profit)

Therefore, Laura should choose 4 workers, which results in the highest profit of $80.

(Table: Workers and Corn Output) Laura Is a Price-Taking Farmer