Aurora Custom Cabinets Produces and Sells Custom Kitchen Cabinets

question 55

Multiple Choice

Aurora Custom Cabinets produces and sells custom kitchen cabinets.The firm has determined that if it hires 10 workers,it can produce 4 sets of cabinets per day.If it hires 11 workers,it can produce 4.2 sets of cabinets per day.It sells each set of cabinets for $2,000,and it pays each of its workers $200 per day.

• A)For the 11th worker, the value of the marginal product of labor is $500.
• B)For the 11th worker, the marginal revenue product is $400.
• C)The firm is maximizing its profit.
• D)If the firm is employing 11 workers, then its profit would increase if it cut back to 10 workers.

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