Table 10-2

-Refer to Table 10-2.The marginal revenue product of labour from the third unit of labour is
A) $5460.
B) $1560.
C) $1260.
D) $780.

Question

Table 10-2
 
-Refer to Table 10-2.The marginal revenue product of labour from the third unit of labour is
A) $5460. 
B) $1560. 
C) $1260. 
D) $780.

Quizplus · Accepted Answer

The marginal revenue product of labour from the third unit of labour is calculated by subtracting the total revenue from the second unit of labour from the total revenue from the third unit of labour which gives $1260. The best choice(s) cannot be determined from this information alone as it depends on the cost of hiring the additional unit of labour. If the cost is less than or equal to $1260, it would be profitable to hire the third unit of labour.

Table 10-2 -Refer to Table 10-2.The Marginal Revenue Product of Labour from Product