Click to see additional instructions Consider a firm that exists for one period. The value of labour's marginal product is given by: VMP =Px MPL, where P is the price on output, and MPL = 20 - 0.1L. The wage rate is $20. Assume that there are hiring and training costs of $40 per worker. If the firm expects the price of output to be $25, what is the optimal level of employment? Important note: Your answer needs to be rounded to 2 decimal places (e.g. 1.23). Any intermediate results should be rounded to at least 4 decimal places. Failure to do so may result in your answer not being accepted as a correct one.
Click to see additional instructions Consider a firm that exists for one period. The value of labour's marginal product is given by: VMP =Px MPL, where P is the price on output, and MPL = 20 - 0.1L. The wage rate is $20. Assume that there are hiring and training costs of $40 per worker. If the firm expects the price of output to be $25, what is the optimal level of employment? Important note: Your answer needs to be rounded to 2 decimal places (e.g. 1.23). Any intermediate results should be rounded to at least 4 decimal places. Failure to do so may result in your answer not being accepted as a correct one.
Chapter11: The Firm: Production And Costs
Section: Chapter Questions
Problem 15P
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Transcribed Image Text:Click to see additional instructions
Consider a firm that exists for one period. The value of labour's marginal product is given by: VMP =Px MP, where P is the price of
output, and MPL = 20 - 0.1L. The wage rate is $20. Assume that there are hiring and training costs of $40 per worker. If the firm
expects the price of output to be $25, what is the optimal level of employment?
Important note: Your answer needs to be rounded to 2 decimal places (e.g. 1.23). Any intermediate results should be rounded to at least 4
decimal places. Failure to do so may result in your answer not being accepted as a correct one.
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