Asked by Noelle Buban on Jun 11, 2024
Verified
Refer to Table 10.1. The marginal revenue product of the third worker is
A) $5.
B) $25.
C) $125.
D) $375.
Marginal Revenue Product
The additional revenue generated from using one more unit of a factor of production, holding all other factors constant.
Third Worker
The hypothetical or actual addition of a third employee in a production process, often considered in discussions of productivity and efficiency.
- Gain insight into the concept of marginal revenue product (MRP) and the steps involved in its calculation.
Verified Answer
SS
Sugeetha SattiyanJun 14, 2024
Final Answer :
C
Explanation :
The marginal revenue product (MRP) of the third worker is calculated by multiplying the marginal product of labor (MPL) by the price per T-shirt. For the third worker, the MPL is 25 T-shirts per day, and the price per T-shirt is $5. Therefore, MRP = 25 T-shirts/day * $5/T-shirt = $125.
Learning Objectives
- Gain insight into the concept of marginal revenue product (MRP) and the steps involved in its calculation.