Figure 18-2

question 110

Multiple Choice

Figure 18-2.The figure shows a particular firm's value-of-marginal-product (VMP) curve.On the horizontal axis,L represents the number of workers.The time frame is daily.
-Refer to Figure 18-2.Assume the following:
• Two points on the firm's production function are (L = 2,Q = 180) and (L = 3,Q = 228) ,
Where L = number of workers and Q = quantity of output.
• The firm pays its workers $120 per day.
• The firm's non-labor costs are fixed and they amount to $250 per day.
We can conclude that

• A) the firm sells its output for $12 per unit.
• B) if the firm is currently employing 2 workers per day,then profit could be increased by $48 per day if a third worker is hired.
• C) the marginal cost per unit of output is $2.50 when output is increased from 180 units per day to 228 units per day.
• D) the firm's maximum profit occurs when it hires 3 workers per day.

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