When Maxwell Fruit Drinks increases the number of workers it employs from 20 to 25, its total labor costs rise from $10,000 to $15,000 a week. We know then that

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The marginal labor cost is calculated by the increase in total labor costs divided by the increase in the number of workers. Here, the total labor costs increased by $5,000 ($15,000 - $10,000) when the number of workers increased by 5 (25 - 20), resulting in a marginal labor cost of $1,000 per worker.

When Maxwell Fruit Drinks Increases the Number of Workers It