1. Optimal Use of a Single Input. Julian Smyth manages production at TaffyApple Inc., a company that produces a variety of taffy/fruit candies. Over the lastseveral months, he has varied the number of employees on his caramel appleproduction line from 5 to 12, and found the following relationship.LaborS67∞a589101112TP5090150200240270290300MPVMPa. In the column labeled MP, calculate the marginal product of labor.b. Suppose the apples sell for $6 per (dozen) box. Calculate the Value MarginalProduct (VMP)c. If labor costs $200 per day, how many laborers should the firm hire?Number

Marginal product (MP) refers to the additional output that is generated by adding one more unit of…

1. Optimal Use of a Single Input. Julian Smyth manages production at Taffy Apple Inc., a company that produces a variety of taffy/fruit candies. Over the last several months, he has varied the number of employees on his caramel apple production line from 5 to 12, and found the following relationship. VMP Labor S6700 5 8 9 10 11 12 TP 50 90 150 200 240 270 290 300 MP a. In the column labeled MP, calculate the marginal product of labor. b. Suppose the apples sell for $6 per (dozen) box. Calculate the Value Marginal Product (VMP) c. If labor costs $200 per day, how many laborers should the firm hire? Number

1. Optimal Use of a Single Input. Julian Smyth manages production at Taffy Apple Inc., a company that produces a variety of taffy/fruit candies. Over the last several months, he has varied the number of employees on his caramel apple production line from 5 to 12, and found the following relationship. VMP Labor S6700 5 8 9 10 11 12 TP 50 90 150 200 240 270 290 300 MP a. In the column labeled MP, calculate the marginal product of labor. b. Suppose the apples sell for $6 per (dozen) box. Calculate the Value Marginal Product (VMP) c. If labor costs $200 per day, how many laborers should the firm hire? Number

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter7: Production And Cost In The Firm

Section: Chapter Questions

Problem 3.7P

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