Exhibit 11-4 Supply and demand curves for food servers
-In Exhibit 11-4, assume that both input and output markets are perfectly competitive. If one additional server increases the number of meals sold by four per day and each meal sells for $10, each additional food server will be paid:

Question

Exhibit 11-4 Supply and demand curves for food servers 
-In Exhibit 11-4, assume that both input and output markets are perfectly competitive. If one additional server increases the number of meals sold by four per day and each meal sells for $10, each additional food server will be paid:

Quizplus · Accepted Answer

In a perfectly competitive market, the wage of an additional worker is equal to the marginal revenue product (MRP) of labor. The MRP is calculated by multiplying the marginal product of labor (additional meals) by the price per meal. Here, 4 meals x $10 = $40 per day.

Exhibit 11-4 Supply and Demand Curves for Food Servers