Fabric, Inc., owns a shoe factory and hires workers in a competitive labor market.The fabric required to make each pair of shoes costs $5. The company’s weekly output of finished jeans varies with the number of workers hires, as shown below:
Number of workers Jeans (pairs/week)
0 0
1 25
2 45
3 60
4 72
5 80
6 85
1. If the shoes sell for $35 a pair and the competitive market wage is $250 per week, how many workers should Fabrc hire? How many pairs of shoes will the company produce each week?
2. Suppose the Clothing Workers Union now sets a weekly minimum acceptable wage of $230 per week. All the worker’s Stone hires belong to the union. How does the minimum wage affect Stones’ decision about how many workers to hire?
Find Marginal Product Revenue, Total Revenue, Labor Cost, Total Cost, Marginal Revenue Cost