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Question
Table 17-4| Quantity of Labor | Output | MPL | Price | Total Revenue | MRPL | Wage |
| 0 | 0 | --- | $200 | $0 | --- | $500 |
| 1 | 6 | 6 | 180 | 500 | ||
| 2 | 11 | 5 | 160 | 500 | ||
| 3 | 15 | 4 | 140 | 500 | ||
| 4 | 18 | 3 | 120 | 500 | ||
| 5 | 20 | 2 | 100 | 500 | ||
| 6 | 21 | 1 | 80 | 500 |
Table 17-4 lists data for the production of Apple iPods. Apple is assumed to be a price maker, so to increase its sales of iPods the firm must lower its price. MPL and MRPL refer to the marginal product of labor and the marginal revenue product of labor, respectively.
Refer to Table 17-4. What are the price and quantity of workers that result in the maximum amount of profit Apple would earn from selling iPods?
A) $140; 2
B) $160; 2
C) $140; 3
D) $180; 1
Answer
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