Question

I need workings

aat Seller hree worKavc in a Competihe narkat Tha raw imaterial equived mak aach wot Costs 14 36 meat Selur hire tftk mast Seller sell hre?

Answer 1

-Here we need to find total cost which includes cost of raw material and labor cost

-Find MC for each labor hired

-Find MR for each labor hired

-The meat seller needs to hire till MR=MC and needs to stop thereafter

a)

No of workers	Meat Production/Day	Cost of raw material	Cost of labor at 80 per day	TC	MC	TR	MR
0	0	0	0	0		0
1	16	80	80	160	160	160	160
2	36	180	160	340	180	360	200
3	54	270	240	510	170	540	180
4	70	350	320	670	160	700	160
5	84	420	400	820	150	840	140
6	96	480	480	960	140	960	120

The meat seller needs to hire 4 number of workers

b.

No of workers	Meat Production/Day	Cost of raw material	Cost of labor at 70 per day	TC	MC	TR	MR
0	0	0	0	0		0
1	16	80	70	150	150	160	160
2	36	180	140	320	170	360	200
3	54	270	210	480	160	540	180
4	70	350	280	630	150	700	160
5	84	420	350	770	140	840	140
6	96	480	420	900	130	960	120

The meat seller needs to hire 5 number of workers

c.

No of workers	Meat Production/Day	MP	VP	MVP
0	0		0	0
1	16	16	128	128
2	36	20	288	160
3	54	18	432	144
4	70	16	560	128
5	84	14	672	112
6	96	12	768	96

Value product = Total product*price

4th labor Value product = 70*8=560

4th labor marginal value product = MP of 4th labor*price = 16*8=128

d.

No of workers	Meat Production/Day	Cost of raw material	Cost of labor at 80 per day	TC	MC	TR	MR
0	0	0	0	0		0
1	16	80	80	160	160	128	128
2	36	180	160	340	180	288	160
3	54	270	240	510	170	432	144
4	70	350	320	670	160	560	128
5	84	420	400	820	150	672	112
6	96	480	480	960	140	768	96

As MC is higher than MR, the meat seller needs to hire 0 labors, as it would leads to losses