Aurora Custom Cabinets produces and sells custom kitchen cabinets.The firm has determined that if it hires 10 workers,it can produce 4 sets of cabinets per day.If it hires 11 workers,it can produce 4.2 sets of cabinets per day.It sells each set of cabinets for $2,000,and it pays each of its workers $200 per day.
A) For the 11th worker, the value of the marginal product of labor is $500.
B) For the 11th worker, the marginal revenue product is $400.
C) The firm is maximizing its profit.
D) If the firm is employing 11 workers, then its profit would increase if it cut back to 10 workers.
Correct Answer:
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