Question

Stephanie is considering how many workers she wants to hire to produce earrings for her business. She sells each pair of earrings she produces for $5.00. The table below shows the productivity of the workers that Stephanie might hire. Assume this is a perfectly competitive market. Instructions: Enter your answers as a whole number. a. Fill in the "Marginal Product," "Total Revenue," and "Marginal Revenue Product" columns Stephanie's Earring Shop and Revenues Labor Total Product (pairs of earrings) Marginal Product (pairs of earrings) Price (dollars) Total Revenue dollars) Marginal Revenue Product (dollars) (workers) 11 20 5 b. Graph Stephanie's demand for labor based on the information in the table above. Instructions: Use the tool provided 'Demand for Labor' to plot the line point by point, starting from 1 worker up to 7 workers (7 points < Prev 2. of 15 Next >

Answer 1

Answer:

We know that, $MP=\frac{\Delta TP}{\Delta L}$

Total Revenue=Price*TP=5*TP

Here Price=$5

Marginal revenue product (MRP)=P*MP

Using the above formulae we get the following table:

Labor (Workers) Total Product (pairs of Marginal Product earrings) (pairs of earrings) Price (S) Revenue (S) Marginal Revenue Product (S) Lano 40 170 190 200 205 NI

And Stephanie's demand for labor

Stephanie's Demand for Labour Wage and Revenue ($) 34 Number of Labor (Workers)