The Following Questions Refer to the table below.
-If each unit of output is sold for $5,the marginal revenue product of the 3^rd worker is

Question

The Following Questions Refer to the table below. -If each unit of output is sold for $5,the marginal revenue product of the 3^rd worker is

Quizplus · Accepted Answer

The marginal revenue product of a worker is the additional revenue generated by adding one more unit of labor. In this case, hiring the 3rd worker would increase the total output by 25 units, resulting in an additional revenue of $125 ($5 x 25). Therefore, the marginal revenue product of the 3rd worker is $125. The best choice(s) for the firm would be to hire only the 1st 2 workers since their marginal revenue products are higher than the wage they demand. Hiring any additional workers would result in a lower marginal revenue product than their wage, making it unprofitable for the firm.

The Following Questions Refer to the Table Below