1000 Class Demand Curve for Led Zeppelin 900
- Slides: 14
1000 Class Demand Curve for Led Zeppelin 900 800 700 Ticket price 600 500 400 300 200 100 0 0 50 100 150 Number of tickets 200 250
Demand Table: Led Zep
9000 Price and Revenue: Led Zeppelin 8000 7000 Revenue 6000 5000 4000 3000 2000 1000 0 0 100 200 300 400 500 Ticket Price 600 700 800 900 1000
9000 Sales and Revenue: Led Zeppelin 8000 7000 6000 Revenue 5000 4000 3000 2000 1000 0 0 50 100 150 Number of Tickets Sold 200 250
I think per average income per capita in the U. S. is in the range 1)Less than $20, 000 9) $55, 000 -$60, 000 2) $20, 000 -25, 000 10) more than $60, 000 3) $25, 000 -30, 000 4) $30, 000 -35, 000 5) $35, 000 -40, 000 6)$ 40, 000 -45, 000 7) $45, 000 -50, 000 8) $50, 000 -$55, 000
I think per average income per capita in the U. S. is in the range 1)Less than $20, 000 9) $55, 000 -$60, 000 2) $20, 000 -25, 000 10) more than $60, 000 3) $25, 000 -30, 000 4) $30, 000 -35, 000 5) $35, 000 -40, 000 6)$ 40, 000 -45, 000 7) $45, 000 -50, 000 8) $50, 000 -$55, 000
Correct answer U. S. Per capita income in 2006 was about $43, 000.
If the average value product of labor is greater than the wage, a firm can increase its profits by hiring more labor. A) True B) False
Example: Wage is $25 workers 1 2 3 4 • • v. output $200 $350 $360 AVP $200 $150 $116. 66 $90 Profits $175 $250 $275 $260 With 4 workers, Avg Val Product is $90. That exceeds the wage. Will profits increase from hiring a fourth worker? No. See table.
A profit maximizing firm will choose the amount of labor that maximizes the marginal value product of labor. A) True B) False
Example: Wage is $25 workers 1 2 3 4 • • v. output $200 $350 $360 MVP $200 $100 $50 $10 Profits $175 $250 $275 $260 To maximize Marginal Value Product hire 1 To maximize profits, hire 3. What does Marginal value product rule say? Hire additional labor so long as marginal value product exceeds the wage.
If this firm maximizes profits by hiring 3 workers, the wage must be between: A) $40 and $60 B) $85 and $120 C) $60 and $100 D) $60 and $80 E) $100 and $113. 33 Number workers. 1 Value of output. $200 2 $240 3 $300 4 $340 5 $350
Why is this? • According to the marginal profit rule, Firm should add workers so long as marginal value product of labor exceeds wage. Marginal value product of third laborer is $60, marginal value product of 4 th is $40. If wage is between $40 and $60, it pays to add third laborer, but not a 4 th.
And on to our lecture…
