Table 18-1.The table displays data for a small,competitive,profit-maximizing firm that produces and sells envelopes.The time frame is one week.

-Refer to Table 18-1.Suppose the firm sells each box of envelopes that it produces for $6.What is the marginal profit of the fourth worker?

Question

Table 18-1.The table displays data for a small,competitive,profit-maximizing firm that produces and sells envelopes.The time frame is one week.
 
-Refer to Table 18-1.Suppose the firm sells each box of envelopes that it produces for $6.What is the marginal profit of the fourth worker?

Quizplus · Accepted Answer

To calculate the marginal profit of the fourth worker, we need to find the difference in total profit between the output level of three workers and four workers. From the table, we can see that the total product of three workers is 5 boxes and the total product of four workers is 6 boxes. 
Therefore, the marginal product of the fourth worker is 1 box (6-5). 
The total cost of hiring four workers is $800, so the marginal cost of the fourth worker is $200 (800-600). 
The marginal profit is calculated as marginal revenue minus marginal cost. 
Since the firm sells each box for $6, the marginal revenue for the fourth worker is $6. 
Therefore, the marginal profit of the fourth worker is $-96 ($6 - $200). 
So, the best choice is B.