AP Microeconomics Prd 4 C a Define Using Graphs As Appropriate the Characteristics of Perfectly Competitive Factor Markets B Explain Using Graphs Questions

Link the competitive labor market to a wage-taking firm, then calculate MRP, choose labor where MRP equals MFC, and allocate labor and capital at least cost.

Exam points

link the market labor graph to the wage-taking firm's horizontal labor supply and MFC curve
calculate marginal product from a total-product schedule and marginal revenue from total revenue
calculate marginal revenue product as MP × MR or as the change in total revenue per worker
use VMP = MP × price when the firm sells output in a perfectly competitive product market
choose the profit-maximizing labor quantity where MRP equals MFC or the competitive wage
use discrete data to hire the last worker with MRP at least equal to wage and reject the next worker
increase or decrease hiring when MRP is above or below MFC and calculate the marginal profit change
calculate the output-price or wage threshold at which an additional worker will be hired
trace an output-demand, output-price or wage change through MRP or MFC to the firm's labor choice
apply MP of labor divided by wage equals MP of capital divided by rental price for least-cost inputs
reallocate labor and capital toward the input with the higher marginal product per dollar
assign an additional worker across establishments to the location with the highest marginal revenue product

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The table provided shows the short-run production function for Lowen Feline, a profit-maximizing firm that produces cat food.

Table for Question AP Microeconomics Prd 4 C a Define Using Graphs As Appropriate the Characteristics of Perfectly Competitive Factor Markets B Explain Using Graphs Questions question 1 — AP Microeconomics

Lowen Feline sells as many bags of cat food as it wants at a market price of $ 10 per bag and hires as many workers as it wants at a market wage of $ 18.

Determine the profit-maximizing number of workers Lowen Feline will hire. Explain using marginal analysis.

State that the profit-maximizing number of workers is 7 and explain that the marginal
revenue product (MRP) of the $7^{\text {th }}$ worker ($ 20) is greater than the marginal factor cost
(MFC) of the $7^{\text {th }}$ worker (wage =$ 18 ), and that the hiring of the $8{ }^{\text {th }}$ worker would
decrease profits because the MRP of the $8^{\text {th }}$ worker ($10) is less than the MFC of the $8^{\text {th }}$
worker (wage = $18).

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AP Microeconomics Prd 4 C a Define Using Graphs As Appropriate the Characteristics of Perfectly Competitive Factor Markets B Explain Using Graphs Questions question 1