Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The additional revenue generated by hiring one more unit of labor
B
The total revenue divided by the number of workers
C
The wage paid to workers
D
The cost of hiring a worker
Understanding the Answer
Let's break down why this is correct
Answer
The marginal revenue product of labor, or MRPL, represents the additional money a company earns from hiring one more worker. It is calculated by taking the extra output that the new worker produces and multiplying it by the price at which that output can be sold. For example, if a bakery hires a new baker who can produce 10 loaves of bread per day, and each loaf sells for $3, the MRPL would be $30, which is the extra income generated by that baker. Understanding MRPL helps businesses decide how many workers to hire, as they want to ensure that the revenue generated by each employee exceeds their wages. In essence, MRPL shows the value of labor in terms of the profits it can bring to a company.
Detailed Explanation
This term means the extra money a company makes when they hire one more worker. Other options are incorrect because This option suggests that we just divide total earnings by the number of workers; This choice talks about how much workers are paid.
Key Concepts
marginal revenue
Topic
Marginal Revenue Product of Labor
Difficulty
easy level question
Cognitive Level
understand
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