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 is a way to measure how much extra money a business makes when it hires one more worker. In this case, when the business hires an additional worker, its total revenue increases from $1000 to $1200. This means the extra revenue generated by that new worker is $200, which is calculated by subtracting the original revenue from the new revenue. Therefore, the marginal revenue product of labor for this additional worker is $200. This figure helps businesses decide if hiring more workers is worth the cost based on the extra revenue they can bring in.
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 suggests the increase is only $100; This option says the increase is $300.
Key Concepts
Marginal Revenue Product
Topic
Marginal Revenue Product Analysis
Difficulty
easy level question
Cognitive Level
understand
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