Use the following to answer questions:
-(Table: Employment and Output) In the table Employment and Output, if the price of a bushel of wheat is $10 and the price of labor (wage) is $120, then the profit-maximizing quantity of labor is:
A) one.
B) three.
C) four.
D) six.

Question

Use the following to answer questions: 
-(Table: Employment and Output) In the table Employment and Output, if the price of a bushel of wheat is $10 and the price of labor (wage) is $120, then the profit-maximizing quantity of labor is:
A) one. 
B) three. 
C) four. 
D) six.

Quizplus · Accepted Answer

The profit-maximizing quantity of labor is where the marginal revenue product (MRP) of labor equals the wage. If the price of wheat is $10, calculate MRP by multiplying the marginal product of labor (MPL) by the price of wheat. Choose the labor quantity where MRP equals $120.

Use the Following to Answer Questions