The price and wage structure that a firm faces is depicted in the following table.

The firm finds that the price of its product changes with the rate of output. In addition, the wage it pays its workers varies with the amount of labor it employs. This firm maximizes profits. How many units of labor will it hire? What wage will it pay?

Marginal costs are supported production expenses that are variable or direct – labor, materials, and equipment, as an example – and not fixed costs the corporate will have whether it increases production or not. Fixed costs might include administrative overhead and marketing efforts – expenses that are the identical irrespective of what percentage pieces are produced.

The marginal revenue product and marginal physical cost is measured to seek out out the profit maximizing equilibrium level.

The following may be a table which represents the value and wage structure of a firm.

In the above table, marginal factor cost per unit is calculated by considering the whole factor cost and therefore the quantity of labor supplied. Marginal revenue product is measured by considering the full revenue and therefore the quantity of labor supplied. within the above table, the marginal revenue product equals marginal factor cost at the extent of $11$units of labor.

As a response, a company is hiring $11$workforce divisions.