Asked by Jordan Hidayat on May 09, 2024
Verified
You should
A) increase the number of repair people working for you.
B) decrease the number of repair people working for you.
C) make no change in the number of people you use.
D) lay off all your employees and do all the work yourself.
Marginal Revenue Product
The extra income produced through the use of an additional unit of a resource, like labor or capital.
Wage Rate
The amount of compensation or payment in terms of money received by an employee from an employer in exchange for work or services.
Repair People
Professionals specialized in fixing or mending machinery, equipment, or structures to ensure proper function and reliability.
- Understand the correlation between marginal revenue product and the requirement for labor and other inputs in businesses.
- Explain the impact of technological progress on the marginal productivity of labor and the resultant alterations in employment levels.
Verified Answer
HA
Hassan AhmadMay 12, 2024
Final Answer :
A
Explanation :
The marginal revenue product of repair people is greater than the wage rate in a competitive labor market. This indicates that the demand for repair services is high relative to the supply of skilled repair people. By increasing the number of repair people working for you, you can take advantage of this opportunity to increase profits. However, it is important to make sure that the additional revenue generated by hiring more repair people exceeds the additional cost of paying their wages.
Learning Objectives
- Understand the correlation between marginal revenue product and the requirement for labor and other inputs in businesses.
- Explain the impact of technological progress on the marginal productivity of labor and the resultant alterations in employment levels.