Asked by Khaly Barry on May 07, 2024
Verified
Answer the question on the basis of the following information: Harry owns a barber shop and charges $6 per haircut.By hiring one barber at $10 per hour,the shop can provide 24 haircuts per eight-hour day.By hiring a second barber at the same wage rate,the shop can now provide a total of 42 haircuts per day. Refer to the given information.The MRP of the second barber is:
A) 18 haircuts.
B) $108.
C) 42 haircuts.
D) $126.
MRP
An acronym for Material Requirements Planning, a system used for production planning and inventory control, or alternatively for Marginal Revenue Product, the extra revenue generated from employing one more unit of a resource.
Wage Rate
The fixed amount of compensation paid to employees for their labor, typically expressed as a rate per hour.
- Acquire knowledge on the subject of Marginal Revenue Product (MRP) and the process involved in computing it.
- Analyze how the marginal product (MP) of labor contributes to a firm's total output and decision-making.
Verified Answer
ZK
Zybrea KnightMay 08, 2024
Final Answer :
B
Explanation :
The MRP (Marginal Revenue Product) of the second barber is calculated by the additional revenue generated by hiring the second barber. With one barber, the shop can provide 24 haircuts per day, and with two barbers, it can provide 42 haircuts per day. The difference is 18 haircuts. Since each haircut is charged at $6, the MRP of the second barber is 18 haircuts * $6 = $108.
Learning Objectives
- Acquire knowledge on the subject of Marginal Revenue Product (MRP) and the process involved in computing it.
- Analyze how the marginal product (MP) of labor contributes to a firm's total output and decision-making.