Suppose a firm producing baseball, it is operating in the short run. The price of baseball is $5, the hourly wage is $12, and each baseball requires $1 worth of material. The firm has experimented with different workforces and the results are shown in the first two columns of the following table.
1. Fill in the blanks in the table.
2. Is it sensible to continue to operate at a loss with 14 workers?
3. Would it be better to operate with 15 workers? Explain, using the marginal principle.
Workers
Baseball
Labor Cost
Material Cost
Variable Cost
Total Revenue
Marginal
Cost
14
56
