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In: Economics

For a short run production function, MPL= 2 and the price at which the good can...

For a short run production function, MPL= 2 and the price at which the good can be sold at is $5, more workers will be hired if the price if the wage rate is less than _____ dollars.

Solutions

Expert Solution

Ans: 10 dollars

Explanation:

MPL = 2

Marginal Revenue Product of Labor (MRPL) = P * MPL = $5 * 2 = $10.

A firm will hire more workers if the wage rate is less than MRPL, i.e., $10.

Rahul Sunny answered 2 years ago
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