G.186. vA firm that is hiring labor in a purely competitive labor market and selling its product in a purely competitive product market willmaximize its profit by hiring labor untilMultiple Choicemarginal revenue product is zero.marginal revenue product exceeds marginal resource (labor) cost by the greatest amountmarginal resource cost is zero.marginal revenue product equals marginal resource (labor) cost.Labor Demand DataMarginal ProductPrice$3333333Employment Producte812345614129742Labor Supply DataEmployment Wage Rate0$ 11111211311411511611The table shows labor demand data on the left and labor supply data on the right. On the basis of the given information, weMultiple ChoiceThe table shows labor demand data on the left and labor supply data on the right. On the basis of the given information, wecan say that the labor supply curve facing the firm is nonexistent.cannot say whether the firm's product market is purely or imperfectly competitive.can say that the firm is selling its product in a purely competitive market.can say that the firm is selling its product in an imperfectly competitive market

In perfect competition , There exists a large no. of buyers and sellers. The competitive firm…

A firm that is hiring labor in a purely competitive labor market and selling its product in a purely competitive product market will maximize its profit by hiring labor until Multiple Choice marginal revenue product is zero. marginal revenue product exceeds marginal resource (labor) cost by the greatest amount marginal resource cost is zero. marginal revenue product equals marginal resource (labor) cost.

A firm that is hiring labor in a purely competitive labor market and selling its product in a purely competitive product market will maximize its profit by hiring labor until Multiple Choice marginal revenue product is zero. marginal revenue product exceeds marginal resource (labor) cost by the greatest amount marginal resource cost is zero. marginal revenue product equals marginal resource (labor) cost.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.8P

See similar textbooks

Similar questions

What is die price commonly called in the labor market?
Table 14.10 shows levels of employment (Labor), the marginal product at each of those levels, and the price at which the film can sell output in the perfectly competitive market where it operates. What is the value of the marginal product at each level of labor? If the firm operates in a perfectly competitive labor market where the going market wage is 12, what is the films profit maximizing level of employment?
Number ofWorkersEmployed Output(Units) MarginalProduct(Units) Value ofMarginalProduct ($)(Market Price=1$) Value ofMarginalProduct ($)(Market Price=2$) 0 0 1 8 2 22 3 36 4 56 5 60 6 72 7 82 8 89 Derive Marginal Product and Value of Marginal Product from the following table when market price for the product is 1$ and 2$ .
Question Recently, the owner of KFC Franchise decided to change how she compensated hertop manager. Last year, the manager received a fixed salary of GHC50,000 and KFCmade GHC110,000 in profits (excluding the manager’s compensation). She fearedthat her store’s performance was connected to the top manager shirking on the joband expected that changes to her top manager’s compensation structure wouldimprove sales. Therefore, this year she decided to offer him a fixed salary of $40,000plus 5 percent of the store’s profit. Since the change, the store is performing muchbetter, and she forecasts profits this year to be $300,000 (again, excluding themanager’s compensation). Assuming the change of compensation is the reason for the increased profits, and the forecast is accurate, how much more money will theowner make (net of payment to her top manager) because of this change?Does the manager make more money under the new payment scheme?
Otherthingsbeingconstant,howwillthefollowinginfluence the hourly earnings of employees? Explain your answer. The employee must work the midnight to 8:00 a.m. shift. The job involves split shifts (work three hours, off two hours, work three additional hours, and so on). Theemployerprovideslow-costchildcareservicesonthe premises. The job is widely viewed as prestigious. The job requires employees to move often from city to city. The job requires substantial amounts of out-of-town travel.
A perfect competitor charges a price of $30. The first worker he would hire would have a marginal physical product of 20, the second worker he would hire would have a marginal physical product of 18, the third worker would have a marginal physical product of 16, and the fourth worker would have a marginal physical product of 14. (a) How many workers would he hire if the wage rate were $540? worker(s) hired How much would his wage bill be? $ wage bill (b) How many workers would he hire if the wage rate were $470? worker(s) hired How much would his wage bill come to? $ wage bill.
You are considering hiring an employee whose marginal revenue product will be $17 per hour, and the market wage for such workers is $15 per hour. You should Select one: a. hire the worker, but agree to pay her $19 per hour. b. not hire the worker since the marginal revenue product is too high. c. not hire the worker because the gap between marginal revenue product and the wage is not large enough. d. hire the worker at the market wage.
(TCO C) You have been hiredto manage a small manufacturing facility whose cost and productiondata are given in the table below.No. of workers Total LaborCost Output TotalRevenue 1 $150 100 $170 2 300 108 550 3 450 114 1150 4 600 119 1470 5 750 123 1600 6 900 125 1700 7 1050 126 1750 Based on your knowledge of marginal analysis, how manyworkers should you hire? Explain youanswer.