Exhibit 13-6

-In Exhibit 13-6, the marginal revenue product of the

Question

Exhibit 13-6
 
-In Exhibit 13-6, the marginal revenue product of the

Quizplus · Accepted Answer

The marginal revenue product (MRP) of each sewing machine can be calculated by dividing the change in total revenue by the change in the number of sewing machines. Using this formula, we get:

- MRP of the first sewing machine = ($100 - $0) / (1-0) = $100
- MRP of the second sewing machine = ($90 - $100) / (2-1) = -$10
- MRP of the third sewing machine = ($216 - $90) / (3-2) = $126
- MRP of the fourth sewing machine = ($356 - $216) / (4-3) = $140
- MRP of the fifth sewing machine = ($396 - $356) / (5-4) = $40

Therefore, the best choice would be to purchase the third sewing machine, as it has the highest MRP of $72.

Exhibit 13-6 -In Exhibit 13-6, the Marginal Revenue Product of the