The benefit to the firm from hiring one additional worker is called the
A) marginal revenue product of labour.
B) marginal revenue.
C) marginal profit.
D) total revenue.

Question

Quizplus · Accepted Answer

The benefit to the firm from hiring one additional worker is measured by the marginal revenue product of labour, which is the extra revenue generated by that additional worker. It takes into account the additional output that the worker can produce and the price that the firm can charge for that output. Options B, C, and D are not directly related to the benefit of hiring an additional worker.

The Benefit to the Firm from Hiring One Additional Worker