Problem: Larry makes gourmet ice cream in small batches. He employs workers who can produce the following quantities in a day:
|
Number of workers
|
Quantity of ice cream
|
|
1
|
4
|
|
2
|
10
|
|
3
|
18
|
|
4
|
24
|
|
5
|
29
|
|
6
|
33
|
|
7
|
36
|
|
8
|
38
|
Larry can sell ice cream for $25 a batch, and the wage rate of his workers is $100 a day.
Q1. Calculate the marginal product of the workers and draw the marginal product curve.
Q2. Calculate the marginal revenue product of the workers and draw the marginal revenue product curve.
Q3. Find Larry’s demand for labor curve.
Q4. How much ice cream does Larry sell?