Answer the question on the basis of the data contained in the following table.Assume that the firm is hiring labor in a purely competitive market. $\begin{array}{ccc}
\begin{array}{ccc}
\begin{array}{c}
\text { Units of } \
\text { Labor }\
\hline
\end{array} && \begin{array}{c}
\text { Total } \
\text { Product }\
\hline
\end{array} \
0 & & 0 \
1 & & 15 \
2 & & 28 \
3 & & 39 \
4 & & 48 \
5 & & 55 \
6 & & 60
\end{array}
\begin{array}{c}
Product\
Price\
\hline
\$ 2.20\
2.00 \
1.80 \
1.60 \
1.40 \
1.20 \
1.10
\end{array}
\end{array}$ Refer to the given data.If the wage rate is $11,how many workers will the firm choose to employ?
A) 5.
B) 4.
C) 3.
D) 2.

Question

Answer the question on the basis of the data contained in the following table.Assume that the firm is hiring labor in a purely competitive market. $\begin{array}{ccc}
\begin{array}{ccc}
\begin{array}{c}
\text { Units of } \
\text { Labor }\
\hline
\end{array} && \begin{array}{c}
\text { Total } \
\text { Product }\
\hline
\end{array} \
0 & & 0 \
1 & & 15 \
2 & & 28 \
3 & & 39 \
4 & & 48 \
5 & & 55 \
6 & & 60
\end{array}
\begin{array}{c}
Product\
Price\
\hline
 \$ 2.20\ 
 2.00 \
 1.80 \
 1.60 \
1.40 \
 1.20 \
 1.10 
\end{array}
\end{array}$ Refer to the given data.If the wage rate is $11,how many workers will the firm choose to employ?
A) 5.
B) 4.
C) 3.
D) 2.

Quizplus · Accepted Answer

The firm will employ workers up to the point where the marginal revenue product (MRP) of labor equals the wage rate. The MRP is calculated by multiplying the marginal product of labor by the product price. For the third worker, the MRP is $11.20 (product price $1.60 x marginal product 7), which is closest to the wage rate of $11.

Answer the Question on the Basis of the Data Contained