Using the information in the following table, calculate themarginal revenue prod
ID: 1232774 • Letter: U
Question
Using the information in the following table, calculate themarginal revenue product (MRP=MPP*MR).UnitResources Total Output Price Resource Price
1 10 5 10
2 25 5 10
3 35 5 10
4 40 5 10
5 40 5 10
using this data determine how many units or resources the firm willwant to acquire.
Explanation / Answer
The marginal revenue product is the product of Marginal Product andMarginal Revenue. Since this seems to be a case in perfectcompetition (all prices are the same), MRP becomes the product ofMarginal Product and Price. Quantity MP Price MRP 1 10 5 50 2 15 5 75 3 10 5 50 4 5 5 25 5 0 5 0 A company will hire workers up to the point where MRP is equal tothe resource price (or the last discrete number for which MRP isstill greater than the resource price).
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.