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 $300 per worker. Calculate the marginal revenue product and complete the table.
|Workers||Marginal Product (MP)||Marginal Revenue Product (MRP) ($)|
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
The marginal revenue product of labor is the marginal product of labor multiplied by $25. This is because the firm exists in a competitive...
See full answer below.
Become a member and unlock all Study Answers
Start today. Try it nowCreate an account
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
fromChapter 3 / Lesson 49
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.