Based on the table above, if the wage rate is $500 and the price of output is $5, how many workers should the firm hire?
What will be an ideal response?
Number of Workers Output MPL MRPL
0 0 -- --
1 50 50 $250
2 110 60 $300
3 300 190 $950
4 450 150 $750
5 590 140 $700
6 665 75 $375
7 700 35 $175
8 725 25 $125
9 710 -15 $(75)
10 705 -5 $(25)
The firm should hire 5 workers. At the 6th worker, MRPL < MLC.
Economics
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