Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
$10
B
$25
C
$50
D
$100
Understanding the Answer
Let's break down why this is correct
Answer
To find the marginal revenue product of labor, we need to understand two key concepts: the price of the product and the marginal product of labor. The marginal product of labor tells us how many additional units of output one more worker can produce, which in this case is 5 units per hour. Since the firm sells each unit for $10, we multiply the marginal product (5 units) by the price per unit ($10) to get the marginal revenue product. This means the marginal revenue product of labor is 5 times 10, which equals $50. Therefore, hiring one more worker will bring in an additional $50 in revenue for the firm.
Detailed Explanation
The marginal revenue product of labor is found by multiplying the price per unit by the marginal product of labor. Other options are incorrect because This answer might come from thinking only about the price per unit; This option could be chosen if someone mistakenly multiplies the price by a different number.
Key Concepts
Price of Output
Topic
Calculating Marginal Revenue Product
Difficulty
easy level question
Cognitive Level
understand
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