The table below shows the short run production function for Corey's Card Store. Number of workers 1 2 3 4 5 6 7 8 Total product per hour 3 7 12 16 19 21 22 20 A. After which worker do diminishing marginal returns begin for Corey's Card Shop? Explain using numbers. B. Assume Corey's Card Shop produces and sells greeting cards in a perfectly competitive market at a unit price of $9. Calculate the marginal revenue product of the 6th worker. Show your work. C. Corey's Card Shop hires labor in a perfectly competitive labor market for clerks at a wage of $25/hour and the market price of greeting cards remains $9. How many workers will Corey's Card Shop hire to maximize its profits? Explain using marginal analysis. D. Assume there is an increase in the demand for greeting cards in the market. What will happen to each of the following?

The table below shows the short run production function for Corey's Card Store. Number of workers 1 2 3 4 5 6 7 8 Total product per hour 3 7 12 16 19 21 22 20 A. After which worker do diminishing marginal returns begin for Corey's Card Shop? Explain using numbers. B. Assume Corey's Card Shop produces and sells greeting cards in a perfectly competitive market at a unit price of $9. Calculate the marginal revenue product of the 6th worker. Show your work. C. Corey's Card Shop hires labor in a perfectly competitive labor market for clerks at a wage of $25/hour and the market price of greeting cards remains $9. How many workers will Corey's Card Shop hire to maximize its profits? Explain using marginal analysis. D. Assume there is an increase in the demand for greeting cards in the market. What will happen to each of the following?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 15P

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