11 75
12 76
a. Fill in the p and w columns.
b. Calculate the MP and the MRP for each amount of labour
employed. Put the numbers between the rows.
c. What is the logic of the firm’s profit-maximizing condition
for hiring labour?
d. How many workers should this profit-maximizing firm
hire?
14. Refer back to the production schedule for the Apple Pie Factory in
Study Exercise 13. In this question we will derive the firm’s
demand curve for labour.
a. On a diagram, with MRP on the vertical axis and the
number of workers on the horizontal axis, plot the MRP
curve.
b. If the wage is $10 per hour, how many workers will be
hired? Why?
c. If the wage is $5 per hour, how many workers will be
hired? Why?
d. If the wage is $20 per hour, how many workers will be
hired? Why?
e. Explain why the MRP curve is the firm’s factor demand
curve.