The table below gives output, marginal product, and average product of a firm producing novelty $\mathrm{T}$-shirts using different numbers of workers. The firm produces t-shirts in a perfectly competitive market where the price of a t-shirt is $\$ 10$ :
\begin{tabular}{llll}
Units of labor & Output & Marginal Product & Average Product \
\hline 0 & 0 & - & - \
1 & 90 & 90 & 90 \
2 & 200 & 110 & 100 \
3 & 330 & 130 & 110 \
4 & 400 & 70 & 50 \
5 & 450 & 50 & 90 \
6 & 420 & 30 & 70
\end{tabular}

What is the marginal revenue product of labor $\left(M R P_{L} ight)$ of the fourth worker?

Choose 1 answer:
(A) $\$ 500$
(B) $\$ 700$
(c) $\$ 100$
(D) $\$ 1300$
(E) $\$ 400$

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Introduction to labor markets
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Question

The table below gives output, marginal product, and average product of a firm producing novelty $\mathrm{T}$-shirts using different numbers of workers. The firm produces t-shirts in a perfectly competitive market where the price of a t-shirt is $\$ 10$ :
\begin{tabular}{llll} 
Units of labor & Output & Marginal Product & Average Product \
\hline 0 & 0 & - & - \
1 & 90 & 90 & 90 \
2 & 200 & 110 & 100 \
3 & 330 & 130 & 110 \
4 & 400 & 70 & 50 \
5 & 450 & 50 & 90 \
6 & 420 & 30 & 70
\end{tabular}

What is the marginal revenue product of labor $\left(M R P_{L}ight)$ of the fourth worker?

Choose 1 answer:
(A) $\$ 500$
(B) $\$ 700$
(c) $\$ 100$
(D) $\$ 1300$
(E) $\$ 400$

Related content
Introduction to labor markets
Report a probler

Accepted Answer

∻Solution∻ ‖ a ⋮ Calculating Marginal Revenue Product (MRP): The marginal revenue product of labor is calculated by multiplying the marginal product (MP) of labor by the price of the output (P). ‖ ‖ b ⋮ Applying the Formula: Given that the price of a T-shirt is $10 and the marginal product of the fourth worker is 70 T-shirts, the MRP is calculated as $10 multiplied by 70. ‖ ∻Answer∻ ⚹ $700 ⚹ ∻Key Concept∻ ⚹ Marginal Revenue Product of Labor (MRP_L) ⚹ ∻Explanation∻ ⚹ The MRP_L is the additional revenue a firm earns from hiring an additional worker, which is the product of the marginal product of labor and the price of the output. In this case, the MRP_L for the fourth worker is $700, indicating the additional revenue generated by the fourth worker. ⚹◊What is the formula for calculating the marginal revenue product of labor ($MRP_{L}$)?⍭ Generate me a similar question◊

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