Assume Ajax Company employs 100 workers and total revenue is $400,000 per week. When Ajax Company employs 101 workers, total revenue is $405,000. The marginal revenue product of the 101st worker is:

Question

Quizplus · Accepted Answer

To calculate the marginal revenue product of the 101st worker, we need to calculate the change in total revenue when the company hires the additional worker.

Change in revenue = Total revenue with 101 workers - Total revenue with 100 workers
Change in revenue = $405,000 - $400,000
Change in revenue = $5,000

Since the marginal revenue product is the additional revenue generated by the additional worker, we can say that the marginal revenue product of the 101st worker is $5,000. Therefore, the correct choice is B.

Assume Ajax Company Employs 100 Workers and Total Revenue Is