A purely competitive firm faces the marginal product schedule shown in the table below. The price...
Question:
A purely competitive firm faces the marginal product schedule shown in the table below. The price of the product is $25 and the wage rate is $300 per worker. Calculate the marginal revenue product and complete the table.
| Workers | Marginal Product (MP) | Marginal Revenue Product (MRP) ($) |
|---|---|---|
| 10 | 2424 | $ |
| 11 | 2020 | ?? |
| 12 | 1616 | ?? |
| 13 | 1212 | ?? |
| 14 | 88 | ?? |
| 15 | 44 | ?? |
The firm should hire:
A. 14 workers
B. 11 workers
C. 13 workers
D. 15 workers
Marginal Product of Labor:
Increasing the amount of labor employed usually increases the level of output. The marginal product of labor measures the change in output associated with a 1 unit increase in the amount of labor employed.
Answer and Explanation: 1
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View this answerAnswer: D
The marginal revenue product of labor is the marginal product of labor multiplied by $25. This is because the firm exists in a competitive...
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Marginal Product of Labor: Definition, Formula & Example
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Chapter 3 / Lesson 49
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Understand the meaning of marginal product of labor. Learn the marginal product of labor (MPL) formula, its significance, and how to calculate MPL with examples.
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