(Table: Labor and Quantity of Output) The table shows the production function for a firm using a given amount of capital. If the price of the product is $15 each, how many workers would the firm employ if the wage per worker is $90?
$\begin{array}{|c|c|}
\hline \text { Units of Labor } & \begin{array}{c}
\text { Quantity of } \
\text { Output }
\end{array} \
\hline 1 & 20 \
\hline 2 & 28 \
\hline 3 & 35 \
\hline 4 & 41 \
\hline 5 & 44 \
\hline 6 & 35 \
\hline
\end{array}$

Question

Quizplus · Accepted Answer

The firm should employ workers up to the point where the marginal revenue product (MRP) of labor equals the wage. The MRP is calculated as the marginal product of labor (change in output) times the price of the product. For the fourth worker, the MRP is (41-35)*$15 = $90, which equals the wage.

(Table: Labor and Quantity of Output) the Table Shows the Production