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A car wash firm calculates that its daily production (in number of cars washed) depends on...

A car wash firm calculates that its daily production (in number of cars washed) depends on the number n of workers it employs according to the formula P=40n-0.05n^2 cars. Calculate the marginal product of labor for the 51st worker and interpret the answer in context

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Answer #1

Marginal product of Labor(MPL) is the additional output produced when hire one additional unit of worker.

Mathematically MPL = dP/dn where P represents total output and n represents number of workers

Here, Production function is given by :

Now for, n = 51, we have dP/dn = 40 - 0.1*51 = 34.9

Hence, marginal product of labor for the 51st worker is 34.9

Interpretation : When he hire 51st worker, the number of cars washed will increase by 34.9 units.

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