Consider a company operating in a competitive market. The company sells units of output and receives a price of $20 per unit, and pays a daily market wage of $330 to each worker it employs. In the following table, complete the column for the value of the marginal product of labor (VMPL) at each quantity of workers. Labor Output Marginal Product of Labor Value of the Marginal Product of Labor (Number of workers) (Units of output) (Units of output) (Dollars) 0 0 20 1 20 19 2 39 18 3 57 15 4 72 12 5 84 On the following graph, use the blue points (circle symbol) to plot the firm's labor demand curve. Then, use the orange line (square symbols) to show the wage rate. (Note: If you cannot place the wage rate at the level you want, move the two end points individually.) Hint: Remember to plot each point halfway between the two integers. For example, when the number of workers increases from 0 to 1, the value of the marginal product for the first worker should be plotted with a horizontal coordinate of 0.5, the value halfway between 0 and 1. Line segments will automatically connect the points. DemandMarket Wage Rate01234540036032028024020016012080400WAGE (Dollars per worker)LABOR (Number of workers) The profit-maximizing quantity of labor at the market wage is .

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: The Markets For The Factor Of Production

Section: Chapter Questions

Problem 7PA

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Consider a company operating in a competitive market. The company sells units of output and receives a price of $20 per unit, and pays a daily market wage of $330 to each worker it employs.

In the following table, complete the column for the value of the marginal product of labor (VMPL) at each quantity of workers.

Labor	Output	Marginal Product of Labor	Value of the Marginal Product of Labor
(Number of workers)	(Units of output)	(Units of output)	(Dollars)
0	0
20
1	20
19
2	39
18
3	57
15
4	72
12
5	84

On the following graph, use the blue points (circle symbol) to plot the firm's labor demand curve. Then, use the orange line (square symbols) to show the wage rate. (Note: If you cannot place the wage rate at the level you want, move the two end points individually.)

Hint: Remember to plot each point halfway between the two integers. For example, when the number of workers increases from 0 to 1, the value of the marginal product for the first worker should be plotted with a horizontal coordinate of 0.5, the value halfway between 0 and 1. Line segments will automatically connect the points.

DemandMarket Wage Rate01234540036032028024020016012080400WAGE (Dollars per worker)LABOR (Number of workers)

The profit-maximizing quantity of labor at the market wage is .

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