Assume labor is the only variable input and that an additional input of labor increases total output from 72 to 80 units. If the product sells for $6 per unit in a purely competitive market, the MRP of this additional worker is
A)$6.
B)$8.
C)$48.
D)$80.

Question

Quizplus · Accepted Answer

The Marginal Revenue Product (MRP) is calculated by multiplying the marginal product of labor (the additional output created by the additional worker) by the price of the product. Here, the additional output is 80 - 72 = 8 units, and the price per unit is $6. Therefore, MRP = 8 units * $6/unit = $48.

Assume Labor Is the Only Variable Input and That an Additional