Use the following to answer questions :
Scenario: The Decision to Hire Labour
Assume that both the product market and the labour market are perfectly competitive.The price of this firm's product is $5.The firm's total product with respect to labour is given in the table that follows. $\begin{array}{llcc}
\hline \text { Quantity } & \
\text { of Labour } & \text { Quantity } \
\text { (workers) } & \text {of Output }\
\hline 0&0\
1 &7\
2 &13\
3&18\
4&21\
\hline
\end{array}$

-(Scenario: The Decision to Hire Labour)Use Scenario: The Decision to Hire Labour.If this profit-maximizing firm hires 2 workers,what is a possible equilibrium wage rate in the labour market?
A) $30
B) $5
C) $13
D) $6

Question

Use the following to answer questions :
Scenario: The Decision to Hire Labour
Assume that both the product market and the labour market are perfectly competitive.The price of this firm's product is $5.The firm's total product with respect to labour is given in the table that follows. $\begin{array}{llcc}
 \hline  \text { Quantity } &  \
 \text { of Labour } & \text {  Quantity } \
 \text { (workers)  } & \text {of Output  }\
\hline 0&0\
1 &7\
2 &13\
3&18\
4&21\
\hline
\end{array}$

-(Scenario: The Decision to Hire Labour)Use Scenario: The Decision to Hire Labour.If this profit-maximizing firm hires 2 workers,what is a possible equilibrium wage rate in the labour market?
A) $30
B) $5
C) $13
D) $6

Quizplus · Accepted Answer

The firm will hire workers until the marginal revenue product (MRP) equals the wage rate. The MRP for the second worker is the change in output (6 units) times the price ($5), which equals $30. Thus, the equilibrium wage rate could be $30.

Use the Following to Answer Questions : Scenario: the Decision

Use the Following to Answer Questions :
Scenario: the Decision