Asked by Nneka Onwualu on Apr 28, 2024
Verified
The Pet Emporium hires workers to bathe cats. The Emporium sells this service for $20. The marginal revenue product of this storeʹs fifth worker is $100. The marginal product of the fifth worker is
A) 0.2 bathed cats.
B) 1 bathed cat.
C) 5 bathed cats.
D) indeterminate from this information.
Marginal Revenue Product
Incremental income produced from the application of one additional unit of resources such as labor or capital.
- Absorb the theory of marginal revenue product (MRP) and comprehend its role in determining hiring strategies.
Verified Answer
YV
Ygnaxio VergaraApr 30, 2024
Final Answer :
C
Explanation :
The marginal revenue product (MRP) is calculated as the marginal product (MP) of the worker multiplied by the price of the service. Given that the MRP of the fifth worker is $100 and the service is sold for $20, we divide $100 by $20 to find the MP, which is 5 bathed cats.
Learning Objectives
- Absorb the theory of marginal revenue product (MRP) and comprehend its role in determining hiring strategies.