When a competitive firm hired nine workers, its profits were $70. When it hired 10 workers, its output was went from 9 to 11 units. Each unit of output sold for $20 while the wage of each worker was $12. What is the firm's new profit level?

When a competitive firm hired nine workers, its profits were $70. When it hired 10 workers, its output was went from 9 to 11 units. Each unit of output sold for $20 while the wage of each worker was $12. What is the firm's new profit level?

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: The Markets For The Factor Of Production

Section: Chapter Questions

Problem 3PA

See similar textbooks

Related questions

Q: Explain how two companies in the same area, hiring identical workers, could pay them different…

A: There are many factors that will be the deciding factor for salary imposition, it can be either the…

Q: Explain the profit-maximization rule for employing factors of production. Explain in terms of our…

A: Production means the goods and services that are produced by converting raw materials into finished…

Q: 10.Consider a price-taking firm that has total fixed cost of $50 and faces a market- determined…

A: d. Fill in the blanks in column 5 of the table by computing marginal cost. Labour output TFC…

Q: Why is the long run labor demand curve more elastic than the demand for labor in the short run?…

A: In a labor market, firms enter to make a demand for labor because they need labor for making…

Q: The local textile faces the faces the following supply curve for labor. Fill in the empty blanks.

A: Given: Wage (A) Units of labor (B) 4 10 5 11 6 12 7 13 8 14 Note: Due to multiple…

Q: Ramone's Drones Inc. makes local deliveries using small drones. Ramone is looking to hire an…

A: Given, Previous revenue = $8,750 per month After hiring new pilot revenue = $10,000 per month

Q: Suppose the hourly wage is $2 and the price of each unit of capital is $5. The price of output is…

Q: A technological advance that increases the marginal product of labor will O increase the supply for…

A: The marginal revenue product of a perfectly competitive firm is the product of the per-unit price…

Q: Refer to Table below. If the price of output is $20 per unit, the marginal revenue product of the…

A: Here Table consists of the information or output which is used to find the marginal revenue at each…

Q: The Levee Spa is a profit-maximing company wanting to hire workers up to the point where the market…

A: The situation which depicts many sellers selling products that are heterogeneous in nature to…

Q: The marginal cost of a unit of labor in a perfectly competitive labor market is a ) its average…

A: The quantity of labor is determined in the labor market where firms demand the labor and workers are…

Q: Color Tile Corp. is a profit-maximizing firm wanting to hire workers up to the point where the wage…

A: The tile company would hire where market wage equals market product.

Q: The firm aims at maximizing its profits in the short run. The wage level is w=140. The production…

A: L P Q MPL 0 5 0 - 1 5 58 58 2 5 112 54 3 5 162 50 4 5 208 46 5 5 250 42 6 5 288 38 7…

Q: Labor demand In the long-run:describe what a firm will do when its long-run condition is not met,…

A: The Long Run is defined as a time period when all the factors of production and the costs are…

Q: Why does a profit-maximizing firm hire workers up to the point where the wage equals the value of…

A: A profit-maximizing, competitive firm will always hire an additional worker when the additional…

Q: Problem 51: With the table below showing the firm's outputs given the labor inputs: Labor 1 2 3 4 5…

A: "A profit-maximizing labor quantity occurs at a point where the value of the marginal product of…

Q: Question A10 The following diagram shows a firm operating in a perfect labour [ market where the…

A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…

Q: The robot bar below leads to: A. Increases in total output, but with temporary job losses for…

A: The quantity of output produced by a firm depends on the factors of production used, availability of…

Q: 10.Consider a price-taking firm that has total fixed cost of $50 and faces a market- determined…

A: Given:- Fixed cost=$50 Wage rate=$10 per labor unit Market determined price=$2 To calculate:- Part…

Q: If the price of the product sells for $1 and the Wage about the workers this firm is hiring?…

A: TP is the total product produced by the using labour input where capital is constant. TP initially…

Q: A firm uses labor (L) and capital (K) to produce output (q) according to the function: q = } Li . K…

A: In the short run, capital will remain fixed. The firm will maximize profit at a point where wage is…

Q: Which of the following scenarios would best represent the backwards supply curve seen on the Labor…

A: The wages and the supply of labour are directly related to each other. If the wages rise, then the…

Q: A competitive firm should keep hiring as long as the value of the marginal product is: greater than…

A: In economics, the marginal product of labor (MPL) is the change in output that results from…

Q: True or False, and explain why. 1. The substitution effect is larger when labor and capital are…

A: In labor economics, markets behaves different on different situations. Workers make trade-off…

Q: Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit.…

A: It is given that wage is $12, price of the product is $3 and MPL (Marginal Product of Labor) is 3.…

Q: As the manager of Lewis Inc., a company that produces lamps, you conducted a study of the production…

A: We have given the short-run production and output schedule of a competitive firm that produces…

Q: Suppose the hourly wage is $10 and the price of each unit of capital is $25. The price of output is…

A: The production function is, f(E, K) = E 1/2K 1/2 The marginal product of labour is, MPE = (1/2)(K/E)…

Q: The firm aims at maximizing its profits in the short run. The wage level is w=140. The production…

Q: X is a factor of production. When Marginal Revenue = $25, Price of X = $200, and the Marginal…

A: The factors of production are sources which can be the constructing blocks of the economy; they're…

Q: To maximize profit, a firm O A. uses the quantity of land at which the rental rate equals the value…

A: Marginal product is the change in total output produced by hiring an additional unit of worker.

Q: X is a factor of production. When Marginal Revenue = $25, Price of X = $200, and the Marginal…

A: The factors of production are assets that are the structural blocks of the economy and include land,…

Q: When hiring additional workers, a firm operating in a perfectly competitive labor market will have…

A: A perfectly competitive labor market is the one where the firms in the market hire as many…

Q: A perfectly competitive firm's production function is Q=8LK where Q is the amount produced, L is the…

A: Marginal revenue product of labor measures the change in total revenue due to a change in labor by a…

Q: After which administrative assistant do diminishing marginal returns begin for Jose's Tax Office?…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: The reason that the supply curve for labor in a purely competitive market rises is because: Multiple…

A: Labor Supply Curve shows the relationship between the quantity of labor supplied at different wages.…

Q: A firm in a perfectly competitive labor market is employing labor where the marginal revenue product…

A: "A firm in a perfectly competitive labor market hire labor upto a point where the marginal revenue…

Q: What is the impact of minimum wage on small/large businesses and their ability to stay competitive?…

A: The minimum wage is set by the government. It is the legal minimum level of wage that any firm has…

Q: (1) Labor Demand Curves are a) more elastic in the short-run than in the long run b) less elastic in…

A: Firms need labor and capital as inputs to their manufacturing process for generating products and…

Q: Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit.…

A: Labor demand refers to the amount of labor-hour that a employer is willing to hire. Worker demand is…

Q: A new coffee shop opens and to maximize profit it hires 5 workers at the competitive wage rate. The…

A: The value of marginal product is the marginal product multiplied by the product price. VMP=MP×P If…

Q: Which of the following statements best describes labor demand? a. The long-run labor demand is…

A: The labor market is the place where firms enter to make demand and households ejtrrt to make supply…

Q: The marginal product of hiring a fourth worker is 40 units of output. The wage rate is $15, and the…

A: The marginal product (MP) of worker is the additional increase in the total product when one more…

Q: Which of the following is required for all workers to earn identical wages in the long run? Check…

A: Long-run equilibrium refers to the time period where all factors of production are variable.

Q: Suppose a firm purchases labor in a competitive labor market and sells its product in a competitive…

A: Competitive market is the place where there is infinite number of buyers and sellers, and every firm…

Question

When a competitive firm hired nine workers, its profits were $70. When it hired 10 workers, its
output was went from 9 to 11 units. Each unit of output sold for $20 while the wage of each
worker was $12. What is the firm's new profit level?
> Question 11
In a conventional modeling of the minimum wage, the minimum wage has a greater impact on
employment when demand is elastic rather than inelastic.
False
O True

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

What is die price commonly called in the labor market?
What determines the demand for labor for a firm operation in a perfectly competitive out market?
Other than the demand for labor, what would be another example of a 'derived demand?
Why are the factors that shift the demand for a product different from the factors that shift the demand for labor? Why are the factors that shift the supply of a product different from those that shift the supply of labor?
What is the formula for the wage elasticity of labor supply?
Table 14.10 shows levels of employment (Labor), the marginal product at each of those levels, and the price at which the film can sell output in the perfectly competitive market where it operates. What is the value of the marginal product at each level of labor? If the firm operates in a perfectly competitive labor market where the going market wage is 12, what is the films profit maximizing level of employment?
What determines the demand for labor for a firm with market power in the output market?
Name some factors that can cause- a shift in the supply curve in labor markets.
Table 14.11 shows levels of employment (Labor), the marginal product at each of those levels, and a monopolys marginal revenue. What is the monopolys marginal revenue product at each level of employment? If the monopoly operates in a perfectly competitive labor market where the going market wage is 20, what is the films profit maximizing level of employment?
A firm faces a perfectly elastic demand for its output at a price of $6 per unit of output. The firm, however, faces an upward-sloped labor supply curve ofE = 20w - 120where E is the number of workers hired each hour and w is the hourly wage rate. Thus, the firm faces an upward-sloped marginal cost of labor curve ofMCE = 6 + 0.1EEach hour of labor produces five units of output. How many workers should the firm hire each hour to maximize profits? What wage will the firm pay? What are the firm’s hourly profits?
Consider a manufacturing firm in a labor market that isperfectly competitive. There are two kinds of workers: productiveworkers whose marginal revenue product is $48,000 per year, andlazy workers whose marginal revenue product is $40,000 per year. Itis difficult for the firm to differentiate between productive andlazy workers. A local college offers a new yearlong astronomy course. Althoughthe cost of tuition is the same for both types of workers, thepsychic cost of having to work hard and get a passing grade islower for productive workers because they are able to learn morequickly than lazy workers. Therefore, the cost of taking the class(including the cost of tuition as well as the psychic cost) is$5,000 per year for a productive worker and $10,000 per year for alazy worker. Because astronomy has little relevance tomanufacturing, taking the class does not increase or decrease aworker's productivity. The firm uses the class as a way to differentiate betweenproductive and lazy…
Give four explanations for why firms might find ii profitable lo pay wages above the level that balances quantity of labor supplied and quantity oflabor demanded.