Asked by Feryal Rushdan on Jun 29, 2024
Verified
The Ernie Egg Store hires workers to paint eggs. The store sells the eggs for $3. The marginal revenue product of this store's fifth worker is $21. The marginal product of the fifth worker is
A) 0.14 eggs.
B) 7 eggs.
C) 36 eggs.
D) indeterminate from this information.
Marginal Revenue Product
The additional revenue generated from employing one more unit of a factor of production.
Marginal Product
The extra output that comes from increasing a particular input by one unit, while keeping all other inputs unchanged.
- Grasp the essentials of marginal revenue product (MRP) and the calculation mechanism.
- Understand the significance of productivity in ascertaining wage rates and employment figures.
Verified Answer
BB
Brittany BurlisonJul 02, 2024
Final Answer :
B
Explanation :
The marginal revenue product (MRP) is calculated as the marginal product (MP) of the labor times the price of the output. Given that the MRP of the fifth worker is $21 and the price per egg is $3, we can find the MP by dividing the MRP by the price per egg: $21 / $3 = 7 eggs.
Learning Objectives
- Grasp the essentials of marginal revenue product (MRP) and the calculation mechanism.
- Understand the significance of productivity in ascertaining wage rates and employment figures.