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Quinn and Courtney manage a factory in the toy air- plane industry, which is perfectly competitive in both the product market and the factor market. They have compiled the following per-day data on worke productivity umber of workers 0 4 arginal product 6 4 2
The price of toy airplanes is $100, the wage per worker is $200, and the rent per machine is $400. Assume the firm always produces the profit- maximizing quantity of airplanes using the cost- minimizing combination of inputs. If the marginal product of capital is 4, how many workers do Quinn and Courtney hire?

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nuhulawal20

This question is incomplete, the complete question is;

Quinn and Courtney manage a factory in the toy air- plane industry, which is perfectly competitive in both the product market and the factor market. They have compiled the following per-day data on worker productivity

Number of workers           0      1     2     3     4     5     6

Marginal product               --     6     5     4      3     2     1

The price of toy airplanes is $100, the wage per worker is $200, and the rent per machine is $400.

Assume the firm always produces the profit- maximizing quantity of airplanes using the cost- minimizing combination of inputs. If the marginal product of capital is 4, how many workers do Quinn and Courtney hire?

Answer: Quinn and Courtney should hire Five ( 5 ) Workers

Explanation:

Given data;

Number of workers           0      1     2     3     4     5     6

Marginal product               --     6     5     4      3     2     1

price of toy P = $100

Wage of worker W = $200

Rent per machine r = $400

Now we know that a profit maximizing organization hire workers till the region or point where their marginal revenue product of labor equals the wages they pay.

so MRPL = Wage

Marginal product labor MPL × price = wage

we substitute

MPL × $100 = $200

MPL = $200 / $100

MPL = 2

So Marginal product labor is 2

Now if we check the table provided in the question;

we will find that a marginal product of 2 corresponds to 5 number of workers.

Therefore Quinn and Courtney should hire Five ( 5 ) Workers

The number of workers do Quinn and Courtney hire is 5.

  • The calculation is as follows:

MRPL = Wage

Marginal product labor MPL × price = wage

So,  

MPL × $100 = $200

MPL = $200 ÷ $100

MPL = 2

So Marginal product labor is 2

 Here we determine that a marginal product of 2 corresponds to 5 number of workers.

Learn more: brainly.com/question/16911495

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