The following table shows data for a perfectly competitive firm. The first column shows the number of resources employed in production, the second column shows the total product of the firm, and the third column shows its product price. Which of the following is the marginal revenue product of the fifth unit of the resource?
Table 11.3

A)$260
B)$130
C)$22
D)$44
E)−$18

Question

The following table shows data for a perfectly competitive firm. The first column shows the number of resources employed in production, the second column shows the total product of the firm, and the third column shows its product price. Which of the following is the marginal revenue product of the fifth unit of the resource? ​
Table 11.3
​

A)$260 
B)$130 
C)$22 
D)$44 
E)−$18

Quizplus · Accepted Answer

To calculate the marginal revenue product (MRP) of the fifth unit of the resource, we need to find the change in total revenue when the firm hires one more unit of the resource.

Total product of the fourth unit = 270 
Total product of the fifth unit = 300 
Change in total product = 300 - 270 = 30

Product price = $22

Marginal revenue product = Change in total revenue / Change in the quantity of the resource

Since the product price is constant, the change in total revenue is equal to the change in total product multiplied by the product price:

Change in total revenue = 30 x $22 = $660

So, MRP of the fifth unit of the resource is $660.

Therefore, the best choice is D, with the explanation provided above.

The Following Table Shows Data for a Perfectly Competitive Firm