When 4 units of labor are employed, total product is 6 units; when 5 units of labor are employed,...
Question:
When 4 units of labor are employed, total product is 6 units; when 5 units of labor are employed, total product is 9 units of output.
If the price of output is $5 per unit, what is the marginal revenue product of the 5th unit of labor?
The Marginal Revenue Product:
The marginal revenue product entails the additional revenue that results from the employment of one extra unit of input. The information about the marginal revenue product helps the firms to determine the quantity of inputs to use in production.
Answer and Explanation: 1
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View this answerMarginal revenue product = change in total revenue (TR) / change in the number of inputs
Total Revenue = Price * Total product
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Total Product, Average Product & Marginal Product in Economics
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Chapter 4 / Lesson 2
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In Economics, there are three factors involved in the theory of production: total product, average product, and marginal product. Explore this theory and learn how to maximize the efficiency of these production tools.
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