Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The additional revenue generated from employing one more unit of labor
B
The total revenue generated from all units of labor employed
C
The profit made from selling additional units of output
D
The cost of employing one more unit of labor
Understanding the Answer
Let's break down why this is correct
Answer
The Marginal Revenue Product (MRP) measures the additional revenue generated from hiring one more unit of a resource, like labor. It helps businesses understand how much extra money they can make by employing an additional worker. To calculate MRP, you multiply the marginal product of that worker, which is how much extra output they create, by the price at which that output can be sold. For example, if a worker produces 10 additional units of a product, and each unit sells for $5, the MRP would be 10 times $5, which equals $50. This means hiring that worker would add $50 to the company's revenue, helping managers decide if it’s worth hiring them.
Detailed Explanation
MRP shows how much extra money a business makes when it hires one more worker. Other options are incorrect because This option confuses total revenue with extra revenue; This choice mixes profit with revenue.
Key Concepts
Marginal Revenue Product (MRP)
Topic
Calculating Marginal Revenue Product
Difficulty
easy level question
Cognitive Level
understand
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