The firm's gain in profit from hiring another worker is
A)the marginal revenue product of the extra worker.
B)the difference between marginal revenue product and the wage of the worker.
C)the extra output of the extra worker.
D)the reduction in costs from hiring another worker.

Question

Quizplus · Accepted Answer

The firm's gain in profit from hiring another worker is the difference between the marginal revenue product (MRP) of the worker and the wage paid to the worker. MRP represents the additional revenue generated by the worker, and subtracting the wage gives the net gain in profit.

The Firm's Gain in Profit from Hiring Another Worker Is