Complete the following table for the firm below which is selling its product in a perfectly competitive market and hiring labor in a perfectly competitive labor market.

MARGINAL
WORKERS TOTAL MARGINAL PRODUCT REVENUE
HIRED PRODUCT PRODUCT PRICE PRODUCT

1 12 ______ $10 ______
2 22 ______ 10 ______
3 30 ______ 10 ______
4 36 ______ 10 ______
5 40 ______ 10 ______
6 42 ______ 10 ______
a) How many workers will the firm hire at a wage of:
$20 _______
$30 _______
$40 _______
b) EXPLAIN.

To complete the table and answer the questions, we need to understand the concepts of marginal product, marginal revenue product, and how they relate to the firm's decision of hiring workers.

1. Marginal Product (MP)
Marginal product measures the additional output produced when an additional unit of labor is hired, while holding other factors of production constant. To calculate the marginal product, we need to find the change in total product for each additional worker hired.

2. Marginal Revenue Product (MRP)
Marginal revenue product represents the additional revenue generated by hiring an additional worker. It is calculated by multiplying the marginal product of labor by the price of the firm's product.

a) How many workers will the firm hire at a wage of $20, $30, and $40?

To determine the number of workers the firm will hire at different wage rates, we need to compare the wage rate with the marginal revenue product.

First, let's calculate the missing values in the table:

- For the missing Marginal Product (MP) values, find the change in total product (TP) for each additional worker. For example, for worker 2, MP = TP2 - TP1.
- For the missing Marginal Revenue (MR) values, multiply the Marginal Product (MP) by the Price of the product ($10 in this case). For example, for worker 2, MR = MP2 * Price.

After calculating the missing values, we can compare the wage rates with the Marginal Revenue Product (MRP) to determine the number of workers hired:

- At a wage rate of $20, the firm will hire workers until the MRP is equal to or greater than $20. If the MRP is less than $20, the firm will not hire additional workers.
- Repeat the above steps for wage rates of $30 and $40.

b) Explanation:
The firm will hire workers until the Marginal Revenue Product (MRP) equals the wage rate. This occurs because a competitive firm maximizes its profit by hiring workers as long as the additional revenue generated by hiring an additional worker (MRP) exceeds the additional cost of hiring that worker (wage rate).

When the MRP is less than the wage rate, it implies that the firm would incur a loss by hiring an additional worker at that wage rate. Thus, the firm will stop hiring workers.