Table 18-12
The table displays data for a small, competitive, profit-maximizing firm that produces and sells envelopes. The time frame is one week.
-Refer to Table 18-12. If the value of the marginal product of the first worker hired is $938, then how many workers does the firm employ?
A)2
B)3
C)4

Question

Table 18-12
The table displays data for a small, competitive, profit-maximizing firm that produces and sells envelopes. The time frame is one week. 
-Refer to Table 18-12. If the value of the marginal product of the first worker hired is $938, then how many workers does the firm employ?
A)2 
B)3 
C)4

Quizplus · Accepted Answer

The table shows that at the first worker, MPL=$938 and MRC=$400, so the firm will continue to hire workers until MRC=MPL, which occurs at the third worker. After the third worker, MRC exceeds MPL, leading to decreasing profit, so the firm will not hire any more workers. Therefore, the firm employs 3 workers.

Table 18-12 The Table Displays Data for a Small, Competitive, Profit-Maximizing Firm