Question

Supervisors	Output
0	100
1	500
2	860
3	1,160
4	1,400
5	1,560
6	1,640
7	1,680
8	1,680

Consider the table above from a hypothetical company. The company sells it's goods in a competitive product market at a price of P = $5. The daily wage of supervisors is W = $600. What is the marginal revenue product of labor (MRP_L) of the fifth worker?

• A. $600

• B. $400

• C. $800

• D. $200

Answer 1

option C

$800

--------

MP(n)=(TP(n)-TP(p))/(n-p)
MP(n)=marginal product of n th unit of input
TP(n)= total product of n inputs
TP(p)=total product of p inputs
it is true for n>p
MPP(5)=(1560-1400)/(5-4)=160

MRPL=MPL*price

MRPL(5)=160*5=$800

Supervisors	Output	MPL	MRPL
0	100
1	500	400	2000
2	860	360	1800
3	1160	300	1500
4	1400	240	1200
5	1560	160	800
6	1640	80	400
7	1680	40	200
8	1680	0	0