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Patty s Pizza Parlor initially had the production function given in the table in Problem 3 A worker s hourly wage rate was

Patty s Pizza Parlor initially had the production function given in the table in Problem 3. A worker s hourly wage rate was $10, and pizza sold for $2. Now Patty buys a new high-tech pizza oven that allows her workers to become twice as productive as before. That is, the first worker now produces 18 pizzas per hour instead of 9, and so on. a. Calculate the new marginal product of labor and the new value of the marginal product of labor. b. Use a diagram to determine how Patty s hiring decision responds to this increase in the productivity of her workforce.

Apr 03 2020 View more View Less

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