Suppose that the marginal product tripled while product price fell by one-half in the table below.
Units of Resource
Total Product (Output)
Marginal Product (MP)
Product Price (in $)
Total Revenue
Marginal Revenue Product (MRP) in $
0
0
0
2
0
0
1
7
7
2
14
14
2
13
6
2
26
12
3
18
5
2
36
10
4
22
4
2
44
8
5
25
3
2
50
6
6
27
2
2
54
4
7
28
1
2
56
2
What would be the new values in the table?
Suppose that the marginal product tripled while product price fell by one-half in the table below.
| Units of Resource | Total Product (Output) | Marginal Product (MP) | Product Price (in $) | Total Revenue | Marginal Revenue Product (MRP) in $ |
| 0 | 0 | 0 | 2 | 0 | 0 |
| 1 | 7 | 7 | 2 | 14 | 14 |
| 2 | 13 | 6 | 2 | 26 | 12 |
| 3 | 18 | 5 | 2 | 36 | 10 |
| 4 | 22 | 4 | 2 | 44 | 8 |
| 5 | 25 | 3 | 2 | 50 | 6 |
| 6 | 27 | 2 | 2 | 54 | 4 |
| 7 | 28 | 1 | 2 | 56 | 2 |
What would be the new values in the table?
Related textbook solutions
Related questions
Suppose a firm in a competitive industry faces an equilibrium product price of $2 per unit of output. Table A provides information on the output produced by various amounts of labor. Use this information to complete the remaining columns of Table A, and to fill in the labor demand schedule in Table B.
Table A: Production Schedule Units of Labor Total Product
| Units of Labor | Total Product | AP | MP | MRP |
| 0 | 0 | |||
| 1 | 13 | |||
| 2 | 25 | |||
| 3 | 34 | |||
| 4 | 42 | |||
| 5 | 46 | |||
| 6 | 48 |
(a) Complete Table A, where AP is the average product of labor, MP is the marginal product of labor, MRP is the marginal revenue product of labor.
(b) Briefly explain why the marginal revenue product of labor (MRP) will be equal to the value of the marginal product of labor (V MP) in this market
| Wage Rate | Quantity Demanded |
| 24 | |
| 16 | |
| 8 |
(c) Complete Table B, with the labor demand schedule for this firm at different wage rates.
(d) If the equilibrium market wage rate is $8, what is the equilibrium quantity of labor hired by the firm?
Which of the events below will cause an increase in the marginal revenue product of labor?
a. an increase in the marginal product of labor
b. an increase in the price of the final good
c. a technology improvement
d. all of the above
Consider the table above. What is the marginal revenue product of the 5th worker
a. $10 b. $20 c. $4 d. $6
|
