-Assume that the product price is $4 per unit and that the hourly wage for workers is $12.Neither price nor wage changes with output.In Table 30.3,the marginal revenue product of the second worker hired is

Question

Quizplus · Accepted Answer

The marginal revenue product (MRP) of a worker is calculated as the additional revenue generated by adding one more worker. In this case, the MRP of the second worker is the additional revenue generated by hiring the second worker.

The formula for MRP is MRP = marginal product * product price.

In this scenario, assume that the marginal product of the second worker is 6 units (meaning that the second worker produces 6 additional units of output per hour). Therefore, the MRP of the second worker is:

MRP = 6 units * $4 price per unit = $24 per hour

Therefore, the best choice is to hire the second worker, as their contribution to the company's revenue is $24 per hour while their wage is only $12 per hour. This means that hiring the second worker will increase the company's profit by $12 per hour.

-Assume That the Product Price Is $4 Per Unit and That