Author Question: A soybean farmer sells soybeans in a perfectly competitive market and hires labor in a perfectly ... (Read 156 times)

tiara099 · **on:** Apr 19, 2019

A soybean farmer sells soybeans in a perfectly competitive market and hires labor in a perfectly competitive market. The market price of soybeans is $10 a bushel, the wage rate is $15, the farmer employs eleven workers and the marginal product of the eleventh worker is 18. What would you advise this farmer to do?

◦ Do nothing because the wage rate and the marginal product of the last worker hired are equal.
◦ Reduce employment because the wage paid is greater than the marginal revenue product.
◦ Increase employment because the wage paid is less than the marginal revenue product.
◦ Reduce the product price so that the wage and marginal revenue product will be equal.

tdewitt · **Reply #1 on:** Apr 19, 2019

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