Table 12.3 Hotspur Incorporated, a manufacturer of microwave ovens, is a price taker in its input and output markets.The firm hires labour at a constant wage rate of $800 per week and sells microwave ovens at a constant price of $80.Table 12.3 shows the relationship between the quantity of labour it hires and the quantity of microwave ovens it produces.
-Refer to Table 12.3.The amount of revenue added as a result of hiring a fourth worker is

Question

Table 12.3  Hotspur Incorporated, a manufacturer of microwave ovens, is a price taker in its input and output markets.The firm hires labour at a constant wage rate of $800 per week and sells microwave ovens at a constant price of $80.Table 12.3 shows the relationship between the quantity of labour it hires and the quantity of microwave ovens it produces.
-Refer to Table 12.3.The amount of revenue added as a result of hiring a fourth worker is

Quizplus · Accepted Answer

To find the amount of revenue added as a result of hiring a fourth worker, we need to calculate the marginal product of labor (MPL) and the marginal revenue product of labor (MRP).

From the table, we can see that the MPL of the fourth worker is 15 microwaves (the difference between the output produced by the third and fourth workers).

To calculate the MRP, we need to multiply the MPL by the price of a microwave:

MRP = MPL x Price = 15 x $80 = $1200

Therefore, the correct answer is A) $1200.

Table 123 Hotspur Incorporated, a Manufacturer of Microwave Ovens, Is