Question

Schedule A		Schedule B
Number of Workers	Total Product	Number of Workers	Total Product
1	30	1	35
2	40	2	47
3	48	3	57
4	54	4	65
5	59	5	71
6	63	6	76

A firm operating in competitive input and output markets purchases new technology, which shifts the total product schedule from A to B, as shown in the data in the table. At the market wage rate of $30 and product price of $5, this firm will

Answer 1

	Schedule B
Number Of workers	Total Product	Marginal Product (MP)	Price * MP
1	35	-	-
2	47	12	60
3	57	10	50
4	65	8	40
5	71	6	30
6	76	5	25

The market equilibrium condition is,

P * MP = w , where w is the wage rate and P is the price.

So, P * MP = w occurs for % number of workers

So with a wage rate of 30 and product price of 5, this firm will hire 5 number of workers.