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
To find the Marginal Revenue Product (MRP) when a firm hires an additional worker, we multiply the Marginal Product of Labor (MPL) by the price of the product. In this case, the MPL is 10 units of output, meaning the new worker produces 10 extra units. If the price of each unit is $5, we calculate the MRP by multiplying 10 by 5, which gives us 50. This means that hiring this additional worker will add $50 in revenue for the firm. Therefore, the MRP helps the firm decide if hiring more workers is a good idea based on the additional money they bring in.
Detailed Explanation
The Marginal Revenue Product is found by multiplying the MPL by the price. Other options are incorrect because This answer might come from thinking only about the MPL; This option may confuse the price with the output.
Key Concepts
Marginal Product of Labor (MPL)
Topic
Calculating Marginal Revenue Product
Difficulty
easy level question
Cognitive Level
understand
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