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s Smith, the owner and manager of the Clear Duplicating Service located near a major university, is contemplating keeping her shop open after 4. P. M

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4. Ms Smith, the owner and manager of the Clear Duplicating Service located near a major university, is contemplating keeping her shop open after 4. P. M. and until midnight. In order to do so, she would have to hire additional workers. She estimates that the additional workers would generate the following pages duplicated). If the price of each unit of output is $10 and each worker hire must be $40 per day, how many workers should Ms Smith hire?;Note;1. P4: Ms. Smith should hire workers as long as their marginal revenue product (MRP) exceeds their marginal resource cost (MRC) and until MRP=MRC.;MRP=MR x MP = P x MP = $10 x MP (use information in the problem to calculate MP). MRC=wages=$40.

 

Paper#18316 | Written in 18-Jul-2015

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