Consider the following production and cost schedule for a firm.The first column shows the number of units of a variable factor of production employed by the firm.
TABLE 13-1
-Refer to Table 13-1.The marginal revenue product of the 15th unit of the factor is
A)-$20.
B)$20.
C)$60.
D)$150.
E)$820.

Question

Consider the following production and cost schedule for a firm.The first column shows the number of units of a variable factor of production employed by the firm.
  TABLE 13-1
-Refer to Table 13-1.The marginal revenue product of the 15th unit of the factor is
A)-$20. 
B)$20. 
C)$60. 
D)$150. 
E)$820.

Quizplus · Accepted Answer

The marginal revenue product (MRP) of a factor of production is the additional revenue generated by using one extra unit of that factor. In this case, the MRP of the 15th unit can be calculated by subtracting the total revenue generated by using 14 units from the total revenue generated by using 15 units. 
Total revenue with 14 units = $10 x 14 = $140 
Total revenue with 15 units = $10 x 15 = $150 
Therefore, MRP of the 15th unit = $150 - $140 = $10. 
Since the price of the output is constant at $10, the MRP of the 15th unit of the factor is also $10. Therefore, the correct answer is B) $20.

Consider the Following Production and Cost Schedule for a Firm