Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The additional revenue generated by employing one more unit of labor
B
The total revenue generated by all units of labor
C
The cost incurred by employing additional labor
D
The average revenue generated per unit of labor
Understanding the Answer
Let's break down why this is correct
Answer
The Marginal Revenue Product (MRP) of labor is an important concept in economics that helps us understand how much additional money a business earns from hiring one more worker. It represents the extra revenue generated by that additional employee's work. For example, if a factory hires one more worker and that worker produces enough goods to bring in $100 more in sales, the MRP of that worker is $100. Businesses use this information to decide how many workers to hire; they want to hire workers as long as their MRP is higher than the cost of paying them. This helps companies maximize their profits by balancing labor costs with the money earned from production.
Detailed Explanation
The MRP of labor shows how much extra money a business makes by hiring one more worker. Other options are incorrect because This option confuses total revenue with extra revenue; This choice talks about costs, not revenue.
Key Concepts
Marginal Product
Topic
Marginal Revenue Product Analysis
Difficulty
easy level question
Cognitive Level
understand
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