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 $30,000?

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 $30,000?

Quizplus · Accepted Answer

The firm will hire 3 workers. At that level, the value of marginal product is $31,000 whereas the cost is only $30,000. Note that a fourth worker would only add $29,000 of value but cost an additional $30,000.

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