Table 18-7
The table displays data for a small, competitive, profit-maximizing firm that produces and sells envelopes. Assume that labor is the only input that varies for the firm.

$$\begin{array} { | c | c | c | }
\hline \begin{array} { c }
\text { Labor } \
\text { (Number of workers) }
\end{array} & \begin{array} { c }
\text { Marginal Product of Labor } \
\text { (Boxes of envelopes per week) }
\end{array} & \begin{array} { c }
\text { Wage } \
\text { (Dollars per } \
\text { worker per week) }
\end{array} \
\hline 0 & & \
\hline 1 & 133 & 393 \
\hline 2 & 111 & 393 \
\hline 3 & 93 & 393 \
\hline 4 & 83 & 393 \
\hline 5 & 75 & 393 \
\hline
\end{array}$$
-Refer to Table 18-7. Suppose the firm sells each box of envelopes that it produces for $5. How many workers should the firm hire?
A)5
B)2
C)4
D)3

Question

Table 18-7
The table displays data for a small, competitive, profit-maximizing firm that produces and sells envelopes. Assume that labor is the only input that varies for the firm.
​
​
 $$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Labor } \
\text { (Number of workers) }
\end{array} & \begin{array} { c } 
\text { Marginal Product of Labor } \
\text { (Boxes of envelopes per week) }
\end{array} & \begin{array} { c } 
\text { Wage } \
\text { (Dollars per } \
\text { worker per week) }
\end{array} \
\hline 0 & & \
\hline 1 & 133 & 393 \
\hline 2 & 111 & 393 \
\hline 3 & 93 & 393 \
\hline 4 & 83 & 393 \
\hline 5 & 75 & 393 \
\hline
\end{array}$$ ​
-Refer to Table 18-7. Suppose the firm sells each box of envelopes that it produces for $5. How many workers should the firm hire?
A)5
B)2
C)4
D)3

Quizplus · Accepted Answer

The firm should hire 4 workers because the marginal product of labor is 83 boxes of envelopes per week, and the wage is $393 per worker per week. The firm's profit is maximized when the marginal product of labor is equal to the wage.

Table 18-7 the Table Displays Data for a Small, Competitive

Table 18-7
the Table Displays Data for a Small, Competitive