Marginal Product of Labor and Production Cost
1. What is the most efficient number of workers to have employed?
2. At what number(s) of workers are you experiencing increasing marginal returns?
3. At what number(s) of workers are you experiencing diminishing marginal returns?
4. At what number(s) are you experiencing negative marginal returns?
e. At what level of output will your firm produce the highest profit? (explain the data from the chart that is most
important to this decision – more than JUST profit)
f. What assumption are we making about marginal revenue?
What information about COST are you missing? (find the answer without it)
You’ll need to make some calculation and columns for cost, total revenue, total cost, and profit.
Will you and your friend be hired by RAD sports? Explain your answer.
Assume you sell your shoes for $50.00 per pair. Determine your Total Cost, Marginal Cost, Marginal Revenue, Total
Revenue, and Profit.
1. At what point did your profits increase?
2. Did your profits decrease at some point? If so, Why?
3. What level of output on the chart would be best for your company?