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A Pizza Shop's Marginal Product of Labor, Measured as the Number

Question 85

Multiple Choice

A pizza shop's marginal product of labor, measured as the number of pizzas delivered per week, is MPl = 55 - 5L, where L is the number of workers. The current average price of a pizza in this highly competitive market is $10. The shop, a monopsonist, faces labor supply of W = 100 + 40l, where W is the wage per week and L is the number of workers. The pizza shop will hire ____ workers when the price of a pizza is $15.


A) 4.68
B) 6.30
C) 2.67
D) 1.89

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