Jennifer is the only employee of her sole proprietorship.She is entertaining the idea of hiring an additional employee.She knows that on her own she can produce 100 units per day.Jennifer figures that Applicant A will help her produce 175 units per day whereas Applicant B will help her produce 155 units per day.Which of the following statements is most accurate?

Question

Quizplus · Accepted Answer

Marginal product refers to the additional output resulting from adding one more unit of a factor of production, in this case, an employee. Jennifer on her own produces 100 units. With Applicant A, production increases to 175 units. Therefore, Applicant A's marginal product is 175 - 100 = 75 units.

Jennifer Is the Only Employee of Her Sole Proprietorship