Question

QUESTION 1 The Taco Tuesday Factory produces Taco's. The firm sells its product and hires its workers in competitive markets. The price (p) for a Taco is $7 and the wage (w) is $18 per hour. The table below shows the total hourly production (Q) for varying amounts of workers (L). (Remember that for a price taking firm, p = MR.) wage price MP MRP a 292 305 312 318 322 325 327 328 27 a) Fill in the table above for Wage, Price, MP and MRP b) In order for a firm to maximize profit how much Labour should they hire and why?

Answer 1

Price per Taco Wage(w) L MP 20 21 22 Q 292 305 312 318 322 325 327 328 "$ 7.00 $ 18.00 per hour 'WAGE' PRICE $ 360 $ 2,044 $ 378 $ 2,135 396 $ 2,184 $ 414 $ 2,226 432 $ 2,254 450 $ 2,275 468 $ 2,289 $ 486 $ 2,296 $ $ $ $ $ $ $ 18 18 18 18 18 18 18 $ $ $ $ $ $ $ MRP 91 49 42 28 21 14 7