Answer to Question #223023 in Microeconomics for Raksha

Question

Labor MRP
0
1 40
2 50
3 70
4 80
A firm produces and sells good X for $5 per unit. The above table shows the firm’s various amounts of labor and the marginal revenue product of labor. What is the marginal product of the third worker?


8 units
10 units
12 units
14 units
16 units

Answer 1

When labor$=3$ ,MRP$=70$

Price per unit $=5$

Marginal product of the third worker is:

$=\frac{MRP}{Price per Unit}$

$= \frac{70}{5}$

$=14.$