Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
$100
B
$80
C
$20
D
$5
Understanding the Answer
Let's break down why this is correct
Answer
To find the marginal revenue product of labor, you need to multiply the price of the product by the marginal product of labor. In this case, the firm sells its product for $20, and the marginal product of labor is 5 units. So, you multiply 20 by 5, which equals 100. This means the marginal revenue product of the labor is $100. This value tells us how much additional revenue the firm earns from hiring one more unit of labor, which is important for making decisions about hiring.
Detailed Explanation
The marginal revenue product is found by multiplying the price of the product by the marginal product of labor. Other options are incorrect because This answer might come from thinking the price is lower or miscalculating; This option suggests that a worker only adds the price of one unit.
Key Concepts
Marginal Revenue Product (MRP)
Price of Output
Topic
Calculating Marginal Revenue Product
Difficulty
medium level question
Cognitive Level
understand
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