3. Firm Y uses labor and capital in production and the current time-period is too short for it to change the amount of equipment and work-space. However, it can change the level of its output by changing the amount of labor it uses, as shown here:
Labour 0 1 2 3 4 5 6
Output 0 12 22 30 36 40 42
A. Derive the marginal revenue product schedule given that the firm can sell each unit it produces for $10. (I.e., calculate the MRPL at each level of employment.)
B. Given that the price of each unit of output is $40 and each worker hired must be paid $40, what is the optimal level of employment of labour?
3. Firm Y uses labor and capital in production and the current time-period is too short for it to change the amount of equipment and work-space. However, it can change the level of its output by changing the amount of labor it uses, as shown here:
Labour 0 1 2 3 4 5 6
Output 0 12 22 30 36 40 42
A. Derive the marginal revenue product schedule given that the firm can sell each unit it produces for $10. (I.e., calculate the MRPL at each level of employment.)
B. Given that the price of each unit of output is $40 and each worker hired must be paid $40, what is the optimal level of employment of labour?
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4. Standard Enterprises produces an output that it sells in a highly competitive market at a price of $100 per unit. Its inputs include two machines (which cost the firm $50 each) and workers, who can be hired on an as-needed basis in a labor market at a cost of $2,800 per worker. Based on the following production data, how many workers should the firm employ to maximize its profits?
| Machines | Workers | Output |
| 2 | 0 | 0 |
| 2 | 1 | 60 |
| 2 | 2 | 100 |
| 2 | 3 | 129 |
| 2 | 4 | 148 |
| 2 | 5 | 160 |
| 2 | 6 | 168 |
