Table 10-3
Hotspur Incorporated, a manufacturer of microwave ovens, is a price taker in its input and output markets. The firm hires labour at a constant wage rate of $800 per week and sells microwave ovens at a constant price of $80. Table 10-3 shows the relationship between the quantity of labour it hires and the quantity of microwave ovens it produces.
-Refer to Table 10-3.What is the amount of revenue added as a result of hiring the 4th worker?
A) $1200
B) $7200
C) 15 microwaves
D) 90 microwaves

Question

Table 10-3
  Hotspur Incorporated, a manufacturer of microwave ovens, is a price taker in its input and output markets. The firm hires labour at a constant wage rate of $800 per week and sells microwave ovens at a constant price of $80. Table 10-3 shows the relationship between the quantity of labour it hires and the quantity of microwave ovens it produces.
-Refer to Table 10-3.What is the amount of revenue added as a result of hiring the 4th worker?
A) $1200 
B) $7200 
C) 15 microwaves 
D) 90 microwaves

Quizplus · Accepted Answer

From the table, we can see that the addition of the 4th worker increases production from 30 microwaves to 40 microwaves, resulting in an additional revenue of $1200 (10 microwaves multiplied by the constant price of $80).

Table 10-3 Hotspur Incorporated, a Manufacturer of Microwave Ovens, Is