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. Profit maximization Consider Live Happley Fields, a small player in the strawberry business whose production has no individual effect on wages and prices. Live Happley roduction schedule for strawberries is given in the following table: Labor Output (Number of workers) (Pounds of strawberries) 0 0 1 10 2 19 3 27 4 34 5 40 Suppose that the market wage for strawberry pickers is $118 per worker per day, and the price of strawberries is $16 per pound. On the following graph, use the blue points (circle symbol) to plot Live Happley's labor demand curve when the output price is $16 per pound. Note: Remember to plot each point between the two integers. For example, when the number of workers increases from 0 to 1, the value of the narginal product of for the first worker should be plotted with a horizontal coordinate of 0.5, the value halfway between 0 and 1. Line segments wil utomatically connect the points. ? 200 180 Demand P= $16 160 140 Demand P $12 120 100 80 60 40 20 0 0 2 3 LABOR (Number of workers) at the given wage and price level, Live Happley should hire Suppose that the price of strawberries decreases to $12 per pound, but the wage rate remains at $118. On the previous graph, use the purple points (diamond symbol) to plot Live Happley's labor demand curve when the output price is $12 per pound. WAGE (Dollars per worker)

. Profit maximization Consider Live Happley Fields, a small player in the strawberry business whose production has no individual effect on wages and prices. Live Happley roduction schedule for strawberries is given in the following table: Labor Output (Number of workers) (Pounds of strawberries) 0 0 1 10 2 19 3 27 4 34 5 40 Suppose that the market wage for strawberry pickers is $118 per worker per day, and the price of strawberries is $16 per pound. On the following graph, use the blue points (circle symbol) to plot Live Happley's labor demand curve when the output price is $16 per pound. Note: Remember to plot each point between the two integers. For example, when the number of workers increases from 0 to 1, the value of the narginal product of for the first worker should be plotted with a horizontal coordinate of 0.5, the value halfway between 0 and 1. Line segments wil utomatically connect the points. ? 200 180 Demand P= $16 160 140 Demand P $12 120 100 80 60 40 20 0 0 2 3 LABOR (Number of workers) at the given wage and price level, Live Happley should hire Suppose that the price of strawberries decreases to $12 per pound, but the wage rate remains at $118. On the previous graph, use the purple points (diamond symbol) to plot Live Happley's labor demand curve when the output price is $12 per pound. WAGE (Dollars per worker)

Exploring Economics
Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter11: The Firm: Production And Costs
Section: Chapter Questions
Problem 15P
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4. Profit maximization Consider Live Happley Fields, a small player in the strawberry business whose production has no individual effect on wages and prices. Live Happley's production schedule for strawberries is given in the following table: Labor Output (Number of workers) (Pounds of strawberries) 0 0 10 19 27 34 5 40 Suppose that the market wage for strawberry pickers is $118 per worker per day, and the price of strawberries is $16 per pound. On the following graph, use the blue points (circle symbol) to plot Live Happley's labor demand curve when the output price is $16 per pound. Note: Remember to plot each point between the two integers. For example, when the number of workers increases from 0 to 1, the value of the marginal product of 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. 200 O 180 Demand P = $16 160 140 120 Demand P $12 100 80 60 40 20 0 0 5 LABOR (Number of workers) At the given wage and price level, Live Happley should hire Suppose that the price of strawberries decreases to $12 per pound, but the wage rate remains at $118. On the previous graph, use the purple points (diamond symbol) to plot Live Happley's labor demand curve when the output price is $12 per pound. WAGE (Dollars per worker) 1 2 3 4
Transcribed Image Text:4. Profit maximization Consider Live Happley Fields, a small player in the strawberry business whose production has no individual effect on wages and prices. Live Happley's production schedule for strawberries is given in the following table: Labor Output (Number of workers) (Pounds of strawberries) 0 0 10 19 27 34 5 40 Suppose that the market wage for strawberry pickers is $118 per worker per day, and the price of strawberries is $16 per pound. On the following graph, use the blue points (circle symbol) to plot Live Happley's labor demand curve when the output price is $16 per pound. Note: Remember to plot each point between the two integers. For example, when the number of workers increases from 0 to 1, the value of the marginal product of 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. 200 O 180 Demand P = $16 160 140 120 Demand P $12 100 80 60 40 20 0 0 5 LABOR (Number of workers) At the given wage and price level, Live Happley should hire Suppose that the price of strawberries decreases to $12 per pound, but the wage rate remains at $118. On the previous graph, use the purple points (diamond symbol) to plot Live Happley's labor demand curve when the output price is $12 per pound. WAGE (Dollars per worker) 1 2 3 4
Now Live Happley should hire when the output price is $12 per pound. Assuming that all strawberry-producing firms have similar production schedules, a decrease in the price of strawberries will cause the strawberry pickers to Suppose that wages decrease to $100 due to a decreased demand for workers in this market. Assuming that the price of strawberries remains at $12 per pound, Live Happley will now hire
Transcribed Image Text:Now Live Happley should hire when the output price is $12 per pound. Assuming that all strawberry-producing firms have similar production schedules, a decrease in the price of strawberries will cause the strawberry pickers to Suppose that wages decrease to $100 due to a decreased demand for workers in this market. Assuming that the price of strawberries remains at $12 per pound, Live Happley will now hire
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