Figure 8.3-Apple Production
-In Figure 8.3,at a wage rate of $30 per hour,this firm will hire _____ workers.

Question

Figure 8.3-Apple Production 
-In Figure 8.3,at a wage rate of $30 per hour,this firm will hire _____ workers.

Quizplus · Accepted Answer

At a wage rate of $30 per hour, the firm will determine the number of workers to hire based on the marginal product of labor. The marginal product of labor decreases as more workers are hired, so the firm will stop hiring workers when the marginal revenue product of labor equals the wage rate, which occurs at the point where the marginal product of labor is at its maximum. In the graph, we can see that the marginal product of labor is highest at a quantity of 6 workers, which means that this is where the firm will stop hiring workers. Therefore, the best choice is C) 6.