In order for Charlie Trotter's, an upscale restaurant in Chicago, ...

[cherise1989]

In order for Charlie Trotter's, an upscale restaurant in Chicago, to maximize profit from the employment of chefs, the restaurant should hire chefs up to the point where the value of marginal product equals the wage rate for chefs.
 
  Is the statement correct or incorrect?

Question 2

How do the marginal and average products of labor affect a firm's marginal and average variable costs in the short run?
 
  What will be an ideal response?

[JaynaD87]

Answer to Question 1

The statement is correct. In order for any firm to maximize its profit, it hires workers until the wage rate equals the value of marginal product.

Answer to Question 2

Over the range of output for which the marginal product is increasing, marginal cost is decreasing and vice versa. At the level of output at which the marginal product is at its maximum, marginal cost will be at its minimum. And, over the range of output for which the average product is increasing, average variable cost is decreasing and vice versa. Finally, the level of output at which the average product is at its maximum is the same level at which average variable cost is at its minimum.

[cherise1989]

Great answer, keep it coming

[matt95]

Thanks for the timely response, appreciate it