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-(Table: Workers and Corn Output)Use Table: Workers and Corn Output.Laura is a price-taking farmer who produces corn.Assume that the wage rate for workers is $125 and the price per bushel of corn is $10.To maximize profits,Laura should employ _____ workers.
A)2
B)3
C)4

Question

Use the following to answer question: 
-(Table: Workers and Corn Output)Use Table: Workers and Corn Output.Laura is a price-taking farmer who produces corn.Assume that the wage rate for workers is $125 and the price per bushel of corn is $10.To maximize profits,Laura should employ _____ workers.
A)2 
B)3 
C)4

Quizplus · Accepted Answer

To maximize profits, Laura should hire workers up to the point where her Marginal Revenue Product (MRP) equals her Marginal Resource Cost (MRC). At 4 workers, Laura's MRP is $240 and her MRC is $500 ($125 per worker x 4 workers). Therefore, to maximize profits, Laura should hire 4 workers.

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