Use the following table to answer the question : Table 16-1 : shows the total number of pizzas produced by 7 workers.

-Refer to Table 16-1.If the pizza industry is competitive,the price of a pizza is $10,and the daily wage of a worker $30,then the pizza shop will hire _____ workers to maximize profits.
A)2
B)3
C)4

Question

Use the following table to answer the question : Table 16-1 : shows the total number of pizzas produced by 7 workers.

-Refer to Table 16-1.If the pizza industry is competitive,the price of a pizza is $10,and the daily wage of a worker $30,then the pizza shop will hire _____ workers to maximize profits.
A)2 
B)3 
C)4

Quizplus · Accepted Answer

To maximize profits, we need to find the point where the marginal revenue (MR) is equal to the marginal cost (MC). In this case, since the price of a pizza is $10, the MR is also $10. We can calculate the MC by dividing the daily wage of a worker by the number of pizzas produced by that worker. For example, the MC for worker 1 is $30/20 = $1.5. We can plot the MC and MR values for each worker and find the point where they intersect. This occurs at worker 4, where the MC is $2.5 and the MR is $10. Therefore, the pizza shop should hire 4 workers to maximize profits.

Use the Following Table to Answer the Question : Table