Suppose a competitive firm that is profit-maximizing pays a wage of $750 per week, and the price of its output is $15 per unit. Based on this information, one may surmise that the firm's marginal revenue product is

Question

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The firm will hire workers up to the point where the marginal revenue product (MRP) equals the wage rate. In this case, the firm pays a wage of $750 per week, which means that the MRP of the last worker must also be $750 per week. Since the price of the output is $15 per unit, and assuming that the last worker adds 1 unit of output, the MRP of the last worker is $15. Therefore, the best choice is D, $750.

Suppose a Competitive Firm That Is Profit-Maximizing Pays a Wage