Mini Mine is a small mining firm in Northern Alberta. The going wage rate in the region is $300 per week. The productivity of the workers in the firm, which has a fixed capital stock, is given below.
(a) If the price of ore is $10 per ton determine the optimal employment level for this firm.
(b) Instead of there being many potential workers, suppose that there are only 6 workers who can be hired in the neighbourhood.
If the price of output is still fixed at $300, and the productivity of workers is still defined by the data in the second row, draw the VMPL curve, insert the supply limit and determine the equilibrium wage.