Ask Question
19 September, 04:13

Profit-maximizing firm Crunchy Chips, Inc. sets out to hire 8 workers in the imperfectly competitive snack market. Given that Crunchy Chips, Inc. is a profit-maxizing firm operating in an imperfectly competitive market, what is the market wage rate they will pay each worker? #

Col1 Workers (L) 2 4 6 8

Col2 MPL 8 6 4 2

Col3 Marginal Revenue $12 $9 $6 $3

Col4 MRPL $96 $54 $24 $6

+3
Answers (1)
  1. 19 September, 04:29
    0
    The market wage rate w = $6

    Explanation:

    As it is a profit maximizing firm, it will hire where (consider the following formula and calculations)

    Step 1.

    MPL = W/P

    Step 2.

    At 8 worker, MPL = 2, P (MR) = 3

    so,

    Step 3.

    2 = w/3

    Step 4.

    w = $6

    Thus, The market wage rate is $6
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Profit-maximizing firm Crunchy Chips, Inc. sets out to hire 8 workers in the imperfectly competitive snack market. Given that Crunchy ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers