-The preceding table gives monthly production information for Peter's Peanuts, a firm in a perfectly competitive industry. The market price of peanuts is $2.00 per pound. What is the value of marginal product from employing the third worker?

Question

Quizplus · Accepted Answer

The value of marginal product (VMP) is calculated by multiplying the marginal product of the worker by the market price. If the third worker increases production by 600 pounds, then VMP = 600 pounds * $2.00 = $1,200.

-The Preceding Table Gives Monthly Production Information for Peter's Peanuts