Number of stylist (per week) total output(per week) marginal physical product (output per stylist) total revenue(dollars per week) marginal revenue product (dollars per stylist)

0 0 ...... $0 ........

1 60 ______ ______ ______

2 80 ______ ______ ______

3 90 ______ ______ ______

4 90 ______ ______ ______

Table $30.4$ Hairstyling Appointments and Revenues Table 30.4 shows how many hairstyling appointments a hair salon can schedule per week based on the number of stylists.In the spaces provided, compute the marginal physical product (MPP) of the hairstylists, total revenue, and the marginal revenue product of the stylists, assuming that a hairstylist charges $60 per appointment.In Table 30.4, suppose a hairstylist is paid $600 per week.How many hairstylists should a profit-maximizing salon hire?

Question

Number of stylist (per week)	total output(per week)	marginal physical product (output per stylist)	total revenue(dollars per week)	marginal revenue product (dollars per stylist)
0	0	......	$0	........
1	60	______	______	______
2	80	______	______	______
3	90	______	______	______
4	90	______	______	______

Table $30.4$ Hairstyling Appointments and Revenues Table 30.4 shows how many hairstyling appointments a hair salon can schedule per week based on the number of stylists.In the spaces provided, compute the marginal physical product (MPP) of the hairstylists, total revenue, and the marginal revenue product of the stylists, assuming that a hairstylist charges $60 per appointment.In Table 30.4, suppose a hairstylist is paid $600 per week.How many hairstylists should a profit-maximizing salon hire?

Quizplus · Accepted Answer

The marginal physical product (MPP) is the additional output generated by an additional stylist. Total revenue is calculated by multiplying the total output by the price per appointment ($60). The marginal revenue product (MRP) is the additional revenue generated by hiring an additional stylist. To maximize profit, a salon should hire stylists as long as their MRP is greater than or equal to their wage ($600). - For the first stylist, MPP = 60 appointments, total revenue = 60 appointments * $60/appointment = $3600, MRP = $3600.- For the second stylist, MPP = 80 - 60 = 20 appointments, total revenue = 80 * $60 = $4800, MRP = $4800 - $3600 = $1200.- For the third stylist, MPP = 90 - 80 = 10 appointments, total revenue = 90 * $60 = $5400, MRP = $5400 - $4800 = $600.- For the fourth stylist, MPP = 90 - 90 = 0 appointments, total revenue remains $5400, MRP = $5400 - $5400 = $0.A profit-maximizing salon should hire stylists as long as their MRP ($3600, $1200, $600) is greater than or equal to their wage ($600). Therefore, the salon should hire 3 stylists, as the MRP of the third stylist exactly matches the wage, but the MRP of the fourth stylist falls below the wage.