If the marginal product of the second worker hired by a firm is 14 units and the price of the tenth unit of output is $7, then the marginal revenue product
A)of the second worker is $98, regardless of the structure of the product market
B)of the second worker is $98 if the firm is a price searcher in the product market
C)of the second worker is $98 if the product market is perfectly competitive
D)of the tenth worker is $98 if the product market is perfectly competitive
E)of the tenth worker is $98 if the firm is a price searcher in the product market

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the marginal revenue equals the price of the product. Thus, the marginal revenue product (MRP) of the second worker is 14 units x $7 = $98.

If the Marginal Product of the Second Worker Hired by a Firm