00:01
Here we're working under the condition of profit maximization, and we're given the information that a sandwich shop employs seven workers who are paid $12 an hour, and they're selling sandwiches, which sell for $6 each.
00:12
Now, we'd like to know, again, under this assumption that the shop is profit maximizing, what is the value of the marginal product and the marginal product for the last worker hired? so working under this condition of profit maximization, we have this identity that we follow, and that's that the wage should be equal to the marginal revenue.
00:31
Marginal revenue can be calculated as our marginal product times our price.
00:36
So essentially our wage should be equal to marginal product times the price.
00:40
And we have a lot of this information already.
00:41
We were told that the wage is $12 an hour.
00:44
This is equal to our marginal product, which is what we're trying to find, times the price of sandwiches, which we were given to be six as well...