The Package Store hires workers to wrap packages. The store sells this service for $5. The marginal revenue product of this store's fifth worker is $50. The marginal product of the fifth worker is
A) 0.01 package.
B) 1 package.
C) 10 packages.
D) indeterminate from this information.

Question

Quizplus · Accepted Answer

The marginal revenue product (MRP) is calculated as the marginal product (MP) of the worker multiplied by the price of the service. Given that the MRP of the fifth worker is $50 and the price per package is $5, dividing $50 by $5 gives us 10 packages, indicating the marginal product of the fifth worker is 10 packages.

The Package Store Hires Workers to Wrap Packages