Blammo Inc. produces greeting cards in a perfectly competitive market. The table below shows the total number of greeting cards produced using different amounts of labor. The market price for a greeting card is $\$ 4$.
\begin{tabular}{lll}
Units of labor & Total produced & Marginal Product \
\hline 0 & 0 & - \
1 & 100 & 100 \
2 & 220 & 120 \
3 & 300 & 80 \
4 & 360 & 60 \
5 & 400 & 40 \
6 & 400 & 0
\end{tabular}

What is the marginal revenue product of labor (MRP_L) of the fifth worker?

Choose 1 answer:
(A) $\$ 400$
(B) $\$ 0$
(C) $\$ 4$
(D) $\$ 60$
(E) $\$ 160$

Question

Blammo Inc. produces greeting cards in a perfectly competitive market. The table below shows the total number of greeting cards produced using different amounts of labor. The market price for a greeting card is $\$ 4$.
\begin{tabular}{lll} 
Units of labor & Total produced & Marginal Product \
\hline 0 & 0 & - \
1 & 100 & 100 \
2 & 220 & 120 \
3 & 300 & 80 \
4 & 360 & 60 \
5 & 400 & 40 \
6 & 400 & 0
\end{tabular}

What is the marginal revenue product of labor (MRP_L) of the fifth worker?

Choose 1 answer:
(A) $\$ 400$
(B) $\$ 0$
(C) $\$ 4$
(D) $\$ 60$
(E) $\$ 160$

Accepted Answer

∻Solution∻ ‖ a ⋮ Marginal Revenue Product (MRP_L): The marginal revenue product of labor is the additional revenue a firm earns by employing one more unit of labor. It is calculated as the marginal product (MP) of labor times the price of the output (P). ‖ ‖ b ⋮ Calculation for the fifth worker: The marginal product for the fifth worker is 40 greeting cards. Given that the price of a greeting card is $4, the MRP_L for the fifth worker is calculated as MRP_L = MP imes P = 40 imes 4. ‖ ∻Answer∻ ⚹ $160 ⚹ ∻Key Concept∻ ⚹ Marginal Revenue Product of Labor (MRP_L) ⚹ ∻Explanation∻ ⚹ The MRP_L for the fifth worker is found by multiplying the marginal product of the fifth worker by the market price of a greeting card, resulting in $160. ⚹◊How does the concept of diminishing marginal returns impact the marginal revenue product of labor in this scenario?⍭ Generate me a similar question◊$

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