A Firm Calculates That the Marginal Product of Labor (MPL)can

question 83

Essay

A firm calculates that the marginal product of labor (MPL)can be found from the following equation:
MPL = 35 - 2L
where L is the number of workers hired.
The production function for this firm is as follows:
Q = 35L - L²
The firm knows it can find profits with the following equation:
Profit = P * Q - W * L
where P stands for the selling price of the good,Q stands for total output,and W represents the wage.Price is equal to $1.
a.If the wage is $11,how many workers will the firm hire? How much profit will it earn?
b.Compare this level of profits to those earned by the firm if it hired one fewer worker than L* and one worker more than L* to demonstrate that L* workers generate the most profit for the firm.

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Definitions:

Freud

Sigmund Freud was an Austrian neurologist and the founder of psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Fixation

In psychology, an obsessive focus or attachment to a person, situation, or stage of development.

Psychosexual Stage

A concept in Freudian psychology referring to a series of developmental stages in childhood, each characterized by a focus on pleasure from a particular body area.

Pleasure-Seeking Energies

An inclination towards actions or experiences that result in enjoyment or satisfaction, driven by internal desires.