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-(Table: Value of the Marginal Product of Labor and Demand) In the figure Value of the Marginal Product of Labor and Demand, the total product of labor is shown for the hourly production of power cords. Assume that the market for power cords is perfectly competitive. If the price of a power cord is $2, the value of the marginal product for the fifth worker is:
A) $0.
B) $20.
C) $40.
D) $60.

Question

Use the following to answer questions: 
-(Table: Value of the Marginal Product of Labor and Demand) In the figure Value of the Marginal Product of Labor and Demand, the total product of labor is shown for the hourly production of power cords. Assume that the market for power cords is perfectly competitive. If the price of a power cord is $2, the value of the marginal product for the fifth worker is:
A) $0. 
B) $20. 
C) $40. 
D) $60.

Quizplus · Accepted Answer

The value of the marginal product (VMP) is calculated by multiplying the marginal product of labor (additional output from one more worker) by the price of the product. If the marginal product of the fifth worker is 20 power cords, and each power cord sells for $2, then VMP = 20 * $2 = $40.

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