Answer
The answer and procedures of the exercise are attached in the following archives.
Explanation
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
C. The company’s prospectus
Answer:
The marginal revenue product has a property known as diminishing marginal return.
The property of diminishing marginal return tells us that theres an amount of input that maximizes revenue, and after this point is reached, additional units of input less addional revenue until diminishing it.
In this example, the Collection Agency is way past the maximum revenue point (located at $34.00 per worker). It needs to lay off employees until it goes from the current $40.00 marginal revenue product, until $34.00 marginal revenue product.
