Question

2. The below table presents the production of a company: AP MP N 100 a. Calculate the quantity that can be produced by 7 workers. b. How many workers needed to produce 48 units? C. Suppose that the company has 7 workers. If the company wants to increase the production by 30 units, how many more workers should hire?

Answer 1

a)

Refer to above table, we can see total product by 5 workers is 10 units.

Marginal Product of 6th to 10th labor=MP=4

So, Total output by 7 workers=10+(7-5)*4=18

b)

In this case total product is somewhere between 30 and 60 units.

Workers needed to produce 30 units=10

Let we need X workers to produce 48 units.

Marginal Product of each worker between 10 and 15=6

Total Product of L workers=30+(L-10)*6

We need 48 units. So,

30+(L-10)*6=48

L-10=(48-30)/6=3

or L=13

We need 13 workers to produce 48 units

c) We know that output of 7 workers=18 units

Desired output=18+30=48 units

We have calculated in part b that we we need 13 workers to produce 48 units.

Number of more workers needed=13-7=6