ECON 104H The current wage is $90 and the price of output (Q)
1.
Fill in the table below. The current wage is $90 and the price of output (Q) is $20. Each box is worth ½ of a point. Enter whole numbers only (no commas, no decimals, no dollar signs) and if a value is negative, be sure to enter the negative sign.
L | Q | MPL | MRP | Marginal Profit | Total Profit |
0 | 0 | - - - - - | - - - - - | - - - - - - - - - - - | 0 |
1 | 8 | ||||
2 | 20 | ||||
3 | 28 | ||||
4 | 35 | ||||
5 | 41 | ||||
6 | 45 |
2.
Use the table from question 1 to complete the next six questions. Enter the correct values in the boxes below. Enter only whole numbers (no commas, no decimals, no dollar signs). Each fill-in-the-blank below is worth 3 points.
This profit maximizing firm will hire workers.
3.
This profit maximizing firm will produce units of output.
4.
This firm's maximum profit equals .
5.
Now suppose that the wage rises to $125. You will need to recalculate the values from the table, given this new wage, to answer the questions below.
This profit maximizing firm will now hire workers.
6.
This profit maximizing firm will now produce units of output.
7.
This firm's maximum profit now equals .
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Solution: ECON 104H The current wage is $90 and the price of output (Q)