For a monopoly,the value of the next worker equals
A) MR ∗ MPL.
B) (price + the effect of increased output on price) ∗ MPL.
C) P(1 + 1/e) ∗ MPL
D) All of the above.

Question

Quizplus · Accepted Answer

In a monopoly, the value of the next worker equals all of the given options because they all represent ways to calculate the marginal revenue product of labor (MRPL) in a monopolistic market. MRPL can be represented as MR * MPL (Marginal Revenue times Marginal Product of Labor), which accounts for the additional revenue generated by hiring one more worker. It can also be expressed as (price + the effect of increased output on price) * MPL, which takes into account how increasing output affects the product's price and thus the revenue. Lastly, the formula P(1 + 1/e) * MPL, where P is price and e is the price elasticity of demand, also calculates the additional revenue from hiring an additional worker, considering the monopolist's ability to set prices. All these expressions are different ways to calculate the value of the next worker in a monopoly, taking into account the unique price-setting power and the impact on revenue.

For a Monopoly,the Value of the Next Worker Equals