An artisanal soap manufacturer operates in an imperfectly competitive product market. The table below shows how the number of workers employed per hour affects the firm's total output of soap gift-boxes per hour and the price at which each box can be sold.
| Number of workers | Total output per hour | Price per box (£) |
|---|---|---|
| 1 | 10 | 15.00 |
| 2 | 18 | 14.00 |
| 3 | 25 | 13.00 |
| 4 | 31 | 12.00 |
| 5 | 35 | 11.00 |
The wage rate for each worker is £40 per hour. The firm has other fixed overhead costs of £80 per hour and no other variable costs.
Assuming the firm is a profit-maximiser, how many workers will it employ per hour?
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64 exam-style questions on AQA A Level Economics 1.6 The labour market (A-level only), covering 1.6.1 The demand for labour, marginal productivity theory, 1.6.2 Influences upon the supply of labour to different markets, 1.6.3 The determination of relative wage rates and levels of employment in perfectly competitive labour markets, 1.6.4 The determination of relative wage rates and levels of employment in imperfectly competitive labour markets, 1.6.5 The Influence of trade unions in determining wages and levels of employment, 1.6.6 The National Minimum Wage, and 1.6.7 Discrimination in the labour market. Each one has a worked solution and a mark scheme showing where the marks go.