Table 10.1
$$\begin{array} { | c | c | }
\hline \begin{array} { c }
\text { Quantity of } \
\text { labour }
\end{array} & \text { Output (units) } \
\hline 1 & 80 \
\hline 2 & 170 \
\hline 3 & 240 \
\hline 4 & 300 \
\hline 5 & 350 \
\hline 6 & 390 \
\hline 7 & 420 \
\hline
\end{array}$$
-Refer to Table 10.1.Suppose the output price is $3.If the firm represented in the table is maximising its profit by hiring six workers,the wage rate is

Question

Table 10.1
 $$\begin{array} { | c | c | } 
\hline \begin{array} { c } 
\text { Quantity of } \
\text { labour }
\end{array} & \text { Output (units) } \
\hline 1 & 80 \
\hline 2 & 170 \
\hline 3 & 240 \
\hline 4 & 300 \
\hline 5 & 350 \
\hline 6 & 390 \
\hline 7 & 420 \
\hline
\end{array}$$
-Refer to Table 10.1.Suppose the output price is $3.If the firm represented in the table is maximising its profit by hiring six workers,the wage rate is

Quizplus · Accepted Answer

The firm is maximising its profit by hiring six workers, so the marginal product of labour is equal to the wage rate. The marginal product of labour is the change in output divided by the change in labour. From the table, we can see that the marginal product of labour is 30 units when the firm hires six workers. Therefore, the wage rate must be $30.

Table 101 -Refer to Table 10