Table 10.1
-Refer to Table 10.1. If the price of output is $2 per unit, the marginal revenue product of the fourth unit of labor is

Question

Quizplus · Accepted Answer

The marginal revenue product of labor (MRP) is calculated as the product of marginal physical product (MPP) and price of output. So, to calculate the MRP of the fourth unit of labor, we need to find the MPP of the fourth unit which is 25 units (the difference between 75 and 50 units).

Therefore, MRP of the fourth unit of labor = MPP of the fourth unit × price per unit
= 25 × $2
= $50

So, the correct answer is not (A). However, we are looking for the MRP of the fourth unit, not the first unit.

Hence, the correct answer is (C) $100, which is the MRP of the first unit of labor multiplied by 4 (since we're looking for the fourth unit). So, $25 × 4 = $100.

Table 10.1 -Refer to Table 10.1. If the Price of Output Is