Table 18-2
The production details of a small apple farm are shown below.Suppose the market for both apple and apple pickers is competitive, with a current market price for a box of apples being $10.Further, assume apple pickers are the sole marginal cost faced by the farmer in selling his product. $\begin{array}{|l|l|l|l|l|l|}
\hline\begin{array}{l}
\text { Labour } \
\text { (number of } \
\text { workers) }
\end{array} & \begin{array}{l}
\text { Output (boxes } \
\text { per day) }
\end{array} & \begin{array}{l}
\text { Marginal } \
\text { product of } \
\text { labour }
\end{array} & \begin{array}{l}
\text { Value of the } \
\text { marginal } \
\text { product of } \
\text { labour }
\end{array}&\text { Wage }& \begin{array}{l}
\text { Marginal } \
\text { profit }
\end{array} \\
\hline 0&0&-&200&\$100\
\hline 1 & 20 & 20 & 160 & \$ 100 & \$ 100 \
\hline 2 & 36 & & 120 & \$ 100 & \$ 60 \
\hline 3 & 48 & 12 & & \$ 100 & \
\hline 4 & & & & \$ 100 & \
\hline 5 & 60 & 4 & & \$ 100 & -\$ 60 \
\hline
\end{array}$
-Refer to table 18-2.What is marginal profit from adding a third worker?

Question

Table 18-2
The production details of a small apple farm are shown below.Suppose the market for both apple and apple pickers is competitive, with a current market price for a box of apples being $10.Further, assume apple pickers are the sole marginal cost faced by the farmer in selling his product. $\begin{array}{|l|l|l|l|l|l|}
\hline\begin{array}{l}
\text { Labour } \
\text { (number of } \
\text { workers) }
\end{array} & \begin{array}{l}
\text { Output (boxes } \
\text { per day) }
\end{array} & \begin{array}{l}
\text { Marginal } \
\text { product of } \
\text { labour }
\end{array} & \begin{array}{l}
\text { Value of the } \
\text { marginal } \
\text { product of } \
\text { labour }
\end{array}&\text { Wage }&  \begin{array}{l}
\text { Marginal } \
\text { profit }
\end{array} \\
\hline 0&0&-&200&\$100\
\hline 1 & 20 & 20 & 160 & \$ 100 & \$ 100 \
\hline 2 & 36 & & 120 & \$ 100 & \$ 60 \
\hline 3 & 48 & 12 & & \$ 100 & \
\hline 4 & & & & \$ 100 & \
\hline 5 & 60 & 4 & & \$ 100 & -\$ 60 \
\hline
\end{array}$
-Refer to table 18-2.What is marginal profit from adding a third worker?

Quizplus · Accepted Answer

To find the marginal profit from adding a third worker, we need to compare the total profit with two workers to the total profit with three workers.

Total profit with two workers: 
Revenue = 50 boxes x $10 = $500 
Costs = 2 workers x $100 per worker = $200 
Total profit = $300

Total profit with three workers: 
Revenue = 60 boxes x $10 = $600 
Costs = 3 workers x $100 per worker = $300 
Total profit = $300

The marginal profit from adding a third worker is the difference between the two total profits, which is $300 - $300 = $0.

Since the marginal profit is not positive, adding a third worker would not increase profits. Thus, the best choice is to stick with two workers.

Table 18-2 the Production Details of a Small Apple Farm

Table 18-2
the Production Details of a Small Apple Farm