Bonita's Braidworks hires workers to braid hair. The store sells the service for $25 per customer. The marginal revenue product of this storeʹs fifth worker is $50. The marginal product of the fifth worker is

Question

Quizplus · Accepted Answer

The marginal revenue product (MRP) is calculated as the marginal product (MP) of the labor times the marginal revenue (MR), which in this case is the price per service ($25) since it's a perfectly competitive market. Given the MRP of the fifth worker is $50, and knowing the price per service is $25, we can calculate the MP as MRP/MR, which is $50/$25 = 2. Therefore, the marginal product of the fifth worker is 2 braided customers.

Bonita's Braidworks Hires Workers to Braid Hair