Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
$50
B
$10
C
$5
D
$15
Understanding the Answer
Let's break down why this is correct
Answer
The marginal revenue product (MRP) of a worker tells us how much additional money the company makes from hiring that worker. To find the MRP, we multiply the extra output produced by the worker by the marginal revenue earned from each unit sold. In this case, the worker increases output by 10 units, and since each unit earns $5, we calculate the MRP as 10 units times $5, which equals $50. This means that hiring this additional worker brings in an extra $50 in revenue for the company. Understanding MRP helps businesses decide if hiring more workers is a good idea based on the extra money they can make.
Detailed Explanation
The marginal revenue product is found by multiplying the extra output by the revenue per unit. Other options are incorrect because This answer might come from thinking each unit brings in $10, but that's not correct; This answer suggests that the worker only adds the revenue of one unit.
Key Concepts
Marginal Revenue Product
Marginal Product of Labor
Marginal Revenue
Topic
Calculating Marginal Revenue Product
Difficulty
easy level question
Cognitive Level
understand
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