Use the following table to answer the question : Table 16-1 : shows the total number of pizzas produced by 7 workers.
-Refer to Table 16-1.If the pizza industry is competitive and the price of a pizza is $10,then which of the following is correct?
A)The total revenue from the sale of 4 pizzas is $30.
B)The marginal value product of the fifth worker is $20.
C)The marginal product of the fourth worker is 2 pizzas.
D)The marginal revenue from selling the fifth pizza is $-10.

Question

Use the following table to answer the question : Table 16-1 : shows the total number of pizzas produced by 7 workers. 
-Refer to Table 16-1.If the pizza industry is competitive and the price of a pizza is $10,then which of the following is correct?
A)The total revenue from the sale of 4 pizzas is $30. 
B)The marginal value product of the fifth worker is $20. 
C)The marginal product of the fourth worker is 2 pizzas. 
D)The marginal revenue from selling the fifth pizza is $-10.

Quizplus · Accepted Answer

To calculate the marginal value product (MVP) of each worker, we need to divide the total revenue (TR) by the number of workers.

MVP = TR / Number of workers

For example, for the third worker, MVP = $60 / 3 = $20.

Using this formula, we can calculate the MVP for each worker and find that the MVP of the fifth worker is $20, which is option B.

Option A is incorrect because the revenue from selling 4 pizzas is $40, not $30. 
Option C is incorrect because the marginal product of the fourth worker is 3 pizzas, not 2 pizzas. 
Option D is incorrect because the marginal revenue from selling the fifth pizza is $10, not -$10; selling an additional pizza will increase revenue by $10.

Use the Following Table to Answer the Question : Table