The following table provides information about production at the XYZ-TV Company. How many workers will XYZ-TV Company hire if the going wage for TV production workers is $32,000?

Question

The following table provides information about production at the XYZ-TV Company.  How many workers will XYZ-TV Company hire if the going wage for TV production workers is $32,000?

Quizplus · Accepted Answer

The firm will hire 2 workers. At that level, the value of marginal product is $33,000 whereas the cost is only $32,000. Note that a third worker would only add $31,000 of value but cost an additional $32,000.

The Following Table Provides Information About Production at the XYZ-TV