A soybean farmer sells soybeans in a perfectly competitive market and hires labor in a perfectly competitive market. The market
1 answer:
Answer:
The correct answer is option D.
Explanation:
The market for soybeans is perfectly competitive and the market for labor is perfectly competitive as well.
The price of soybeans is fixed at $6/bushel.
The wage rate is $30.
A farmer hires eight workers.
The marginal product of the eighth worker is 7 bushels.
The marginal revenue product of the eighth worker is
=
=
=$42
We see that the wage rate is lower than the marginal revenue product. So the farmer should increase employment till the wage rate and marginal revenue product become equal.
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Answer:
Best reorder size = 216
Reorder point = 35
Explanation:
Required:
Using the above information, find the best order size and the reorder point.
To find the best order size, EOQ, use the formula:
Best reorder size is 216 mufflers
To find the reorder point, use the formula:
R = d' L + z
Where d' = average daily demand
L = lead time in days
z = number of standard deviation from a specified probability
= standard deviation of usage in lead time
Daily demand, d'=
12 mufflers
Since lead time is 2 working days, standard deviation of lead time
Therefore,
R = d' L + z
= (12 * 2) + (1.28 * 8.48)
= 24 + 10.9
= 34.9
Approximately 35
Reorder point is = 35 mufflers