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1.6 The labour market (A-level only)

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Question 12

The table below shows how the total physical product of labour (TPPLTPP_LTPPL​) per day changes as more workers are employed by a price-taking firm producing organic honey:

Number of workers (LLL)Total Physical Product (TPPLTPP_LTPPL​, jars of honey)
00
140
275
3102
4122
5135

The market price of honey is £4.00\text{\pounds}4.00£4.00 per jar, and the market wage rate for honey-harvesting workers is £100\text{\pounds}100£100 per day.

According to marginal productivity theory, how many workers should the firm employ to maximize its daily profit?

2 workers

3 workers

4 workers

5 workers

1.6 The labour market (A-level only) Questions

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  2. /Economics
  3. /1.6 The labour market (A-level only)