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aliina [53]
3 years ago
6

Refer to Exhibit 26-5. Assume the firm is a factor price taker and that the price of a unit of labor is constant at $1,200. The

firm should hire __________ of labor.
Business
1 answer:
Ivenika [448]3 years ago
8 0

Answer: 3 units of labor

Explanation:

The marginal revenue product will be:

- 1 labor unit

Marginal product = 500

Marginal revenue product = 500 × 5 = 2500

- 2 labor unit

Marginal product = 400

Marginal revenue product = 400 × 5 = 2000

- 3 labor unit

Marginal product = 250

Marginal revenue product = 250 × 5 = 1250

- 4 labor unit

Marginal product = 200

Marginal revenue product = 200 × 5 = 1000

- 5 labor unit

Marginal product = 200

Marginal revenue product = 200 × 5 = 1000

Therefore, till the third unit of labor, we can infer that the marginal revenue product is more than the marginal revenue cost. The 4th and 5th unit of labor will become costly to hire more labor.

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To obtain your credit report, you should _____.
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