Table 17-5 -Refer to Table 17-5.Oil Can Harry's, a New Automobile Service

question 251

Essay

Table 17-5

-Refer to Table 17-5.Oil Can Harry's, a new automobile service shop, is ready to start hiring.The table above shows the relationship between the number of mechanics the firm hires and the quantity of oil changes it produces.
a.Suppose the price of an oil change is $20.Complete the table by filling in the values for marginal product and marginal revenue product.
b.Oil Can Harry's is an input price-taker.Suppose the wage paid to mechanics is $80 per day.What is the profit-maximizing number of mechanics?
c.Suppose the wage rate rises to $100 per day.
(i) What happens to the firm's demand curve for mechanics?
(ii) What happens to the profit-maximizing quantity of mechanics?
d.Suppose the wage rate is $60 per day and the price of an oil change is now $15.
(i) What happens to the firm's demand curve for mechanics?
(ii) What happens to the profit-maximizing quantity of mechanics?

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Definitions:

Performance Improvement

A systematic approach to analyzing and enhancing organizational processes and individual performance to achieve better outcomes.

Ability

The competence or skillset that an individual possesses to perform specific tasks or activities.

Motivation

The internal drive or external stimulus that prompts individuals to take action towards achieving a goal.

Appraisal Politics

The dynamics and power plays involved in the process of evaluating employee performance, which can affect fairness and outcomes.