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

Question

Quizplus · Accepted Answer

The marginal revenue product (MRP) is the additional revenue generated by the last worker. Therefore, the MRP of the 101st worker can be calculated as follows:

MRP = Change in Total Revenue / Change in Quantity of Labor

MRP = ($405,000 - $400,000) / (101 workers - 100 workers)

MRP = $5,000

Hence, the answer is B.

Assume Ajax Company Employs 100 Workers and Total Revenue Is