Suppose a firm increases the quantity of labour employed from 5 to 6 workers,and as a result,the firm's total output increases from 100 units to 400 units.The marginal product of the sixth worker is
A)150 units.
B)100 units.
C)400 units.
D)300 units.
E)66.67 units.

Question

Quizplus · Accepted Answer

Marginal product of labour (MPL) is the additional output produced by hiring an additional unit of labour, with all other inputs constant.

MPL = Change in Total Product / Change in Labour

In this case, changing from 5 workers to 6 workers resulted in an increase in output from 100 units to 400 units, which is a change of 300 units. Therefore:

MPL = 300 / (6 - 5) 
MPL = 300 units

Hence, the marginal product of the 6th worker is 300 units. Answer choice (D) is correct.

Suppose a Firm Increases the Quantity of Labour Employed from 5