Workers Output (boxes) Marginal Product of Labor Office Rent ($) Labor Cost ($) Total Cost ($) 0 0 -- 1 220 400 200 2 250 800 3 680 4 160 1,200 5 940 1,000 6 980 1,600
a. Complete the table.
b. In the last week of summer Suzette closes her business to go on a family vacation. What are her costs during that week?
c. In one week Suzette exactly breaks even. If her revenue for the week is $1,200, how many boxes of fruit and nuts did she produce?
d. Judging from the marginal product of labor data, would you say that Suzette had to settle for increasingly unproductive workers? Explain your answer.
e. Suzette has received an order for 1,500 boxes of nuts per week for the next 3 months. If she expects the trend in the marginal product of labor will continue in the same direction, what do you think she should do? Should she not commit until she can move to a larger space or should she just hire more workers? Explain your answer.