Essay
Table (Baristas Labor I). Suppose that the wage rate for baristas is $9 per hour and the average price of cappuccino is $3. 
a. Find the profit-maximizing quantity of labor.
b. What would be the new profit-maximizing quantity of labor if the market wage increased $12 per hour, ceteris paribus?
c. What would be the new profit-maximizing quantity of labor if the market wage remained at $9 per hour but the price of cappuccino increased to $4.50, ceteris paribus?
d. What would be the new profit-maximizing quantity of labor if the market wage remained at $9 per hour and the price of cappuccino at $3 but baristas all became 10% more productive because of an improvement in the way cappuccinos are made?
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a. Please see table. The profit-maximizi...View Answer
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