A firm produces 4,000 units of output using 500 workers.Marginal cost is $10,the wage rate is $160,and total fixed cost is $100,000.What is the marginal product of labor?
A)$8 per worker
B)8 units of output per worker
C)$16 per worker
D)16 units of output per worker
E)none of the above

Question

Quizplus · Accepted Answer

To find the marginal product of labor, we need to use the formula:

Marginal Product of Labor (MPL) = (Change in Total Output / Change in Labor)

From the information given in the problem, we know that:

- Total Output = 4,000 units
- Marginal Cost = $10
- Wage Rate = $160
- Total Fixed Cost = $100,000

We can find the change in total output by finding the difference between the total output with and without an additional worker. Let's assume that adding one more worker will increase the total output to 4,016 units. Then, the change in total output would be:

Change in Total Output = 4,016 - 4,000 = 16 units

The change in labor is simply one worker. So, we have:

Change in Labor = 1

Now, we can use the formula to find the marginal product of labor:

MPL = (Change in Total Output / Change in Labor) = 16 / 1 = 16 units of output per worker

Therefore, the answer is D - 16 units of output per worker.

A Firm Produces 4,000 Units of Output Using 500 Workers