The following table shows how apple output changes as additional apple pickers are hired.Calculate marginal physical product,total revenue,and marginal revenue product.The price of apples is $4 per basket.
Table 8.1-Apple Production
-In Table 8.1,what is the marginal physical product of the 2^nd apple picker?

Question

The following table shows how apple output changes as additional apple pickers are hired.Calculate marginal physical product,total revenue,and marginal revenue product.The price of apples is $4 per basket.
Table 8.1-Apple Production

-In Table 8.1,what is the marginal physical product of the 2^nd apple picker?

Quizplus · Accepted Answer

The marginal physical product of the 2nd apple picker is calculated by finding the difference in apple output between having one and two apple pickers. So, the marginal physical product is 6 baskets per day [(30-24)=6].

To find the total revenue, we multiply the quantity of apples by the price of a basket, which is $4. For example, when there are two apple pickers, the total revenue is $96 (24 x 4) baskets per day.

Marginal revenue product is calculated by multiplying the marginal physical product by the price per basket. So, the marginal revenue product of the 2nd apple picker is $24 (6 x 4) per day.

To maximize profits, the firm should continue hiring apple pickers as long as the marginal revenue product of each additional worker is greater than their wage. If the wage of each worker is less than $24 per day, the firm should continue hiring more workers.

The Following Table Shows How Apple Output Changes as Additional