Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
$200
B
$100
C
$300
D
$400
Understanding the Answer
Let's break down why this is correct
Answer
The marginal revenue product of labor (MRP) measures how much additional revenue a company earns by hiring one more worker. In this case, when the company hires one extra worker, total revenue increases from $1000 to $1200. This means the additional revenue generated by that worker is $200, which is calculated by subtracting the old total revenue from the new total revenue. Therefore, the marginal revenue product of labor for this additional worker is $200. This shows how adding more workers can directly impact a business's earnings.
Detailed Explanation
The marginal revenue product of labor is the extra money made from hiring one more worker. Other options are incorrect because This answer might come from thinking about a smaller increase; This choice could be confusing because it seems like a big increase.
Key Concepts
Marginal Revenue Product
Topic
Marginal Revenue Product Analysis
Difficulty
easy level question
Cognitive Level
understand
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