Assume that labor is the only variable input and that an additional input of labor increases total output from 72 to 78 units.If the product sells for $6 per unit in a perfectly competitive market,then the MRPof this additional worker is:
A)$78
B)$72
C)$36
D)$39
E)$6

Question

Quizplus · Accepted Answer

The MRP (Marginal Revenue Product) of an additional worker can be calculated as the additional output multiplied by the product price, i.e., MRP = ΔQ × P.

Here, the additional output due to the additional worker is 6 units (78 - 72), and the product price is $6 per unit.

So, the MRP of this additional worker is:

MRP = ΔQ × P = 6 × 6 = $36

Therefore, the best choice is C) $36.

Assume That Labor Is the Only Variable Input and That