Suppose a firm producing baseball, it is operating in the short run. The price of baseball is $5, the hourly wage is $12, and each baseball requires $1 worth of material. The firm has experimented with different workforces and the results are shown in the first two columns of the following table. 1. Fill in the blanks in the table. 2. Is it sensible to continue to operate at a loss with 14 workers? 3. Would it be better to operate with 15 workers? Explain, using the marginal principle. Workers 14 15 Baseball 56 60 Labor Material Variable Total Cost Cost Cost Revenue Marginal Cost

Suppose a firm producing baseball, it is operating in the short run. The price of baseball is $5, the hourly wage is $12, and each baseball requires $1 worth of material. The firm has experimented with different workforces and the results are shown in the first two columns of the following table. 1. Fill in the blanks in the table. 2. Is it sensible to continue to operate at a loss with 14 workers? 3. Would it be better to operate with 15 workers? Explain, using the marginal principle. Workers 14 15 Baseball 56 60 Labor Material Variable Total Cost Cost Cost Revenue Marginal Cost

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Cost Of Production

Section: Chapter Questions

Problem 4PA

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