Question

Below is a table showing the production numbers for a chair factory (where the production numbers are based on chairs being produced per day).

Workers	Total Product (TP)	Average Product (AP)	Marginal Product (MP)	Marginal Revenue Product (MRP)
0	0	-	-	-
1	10
2		15
3			40
4		35
5	190
6			30
7	240
8	250
9			5

 

a) Fill in the missing numbers for the TP, AP and MP columns (round to the nearest chair)

b) In one sentence explain what the AP of 4 workers being 35 tells us.

c) In one sentence explain what your answer for MP of the 4^th worker tells us.

d) Given the fact that each chair produced in our factory can be sold at the market price of $10 per chair, fill in the MRP column (round to the nearest dollar).

e) In one sentence explain what your answer for MRP for the 4^th worker tells us.

f) If the market wage for workers doing manufacturing work (such as chair production) is $180 per day, determine the number of workers this firm should hire to maximize its profit.

Explain your answer using MRP.