Question

Save Answer Consider that the short-run production function for meat-packaging firm is q=0.5 of the marginal cost of producing the 10th unit is $5, then one can conclude that the wage per unit of laboris 2.5 points $0.25 $1.00 cannot be determined without additional information $0.05

Answer 1

The answer is (a) $0.25

When q = 9, we have L^0.5 = 9 => L = 9^2 = 81

When q = 10, we have L^0.5 = 10 => L = 10^2 = 100

Thus, to increase production from 9 to 10, 19 additional workers are required.

The marginal cost of producing the 10th unit = Additional workers hired*wage per worker

=> 5 = 19*w

=> w = 5/19 = 0.26 (close to 0.25)

Thus, the answer is (a)