When 4 units of labor are employed, total product is 6 units; when 5 units of labor are employed, total product is 9 units of output. If the price of output is $5 per unit, what is the marginal revenue product of the 5th unit of labor?

Question

Quizplus · Accepted Answer

Marginal product of labor (MPL) = (Change in Total Product / Change in Labor Input)
MPL of 5th unit of labor = (9-6) / (5-4) = 3

Marginal Revenue Product (MRP) of labor = MPL * Price of output
MRP of 5th unit of labor = 3 * $5 = $15

Thus, the best choice is C.

When 4 Units of Labor Are Employed, Total Product Is