Question

Suppose a certain firm is able to produce 180 units of output per day when 10 workers are hired. The firm is able to produce 190 units of output per day when 11 workers are hired (holding other inputs constant). Calculate the marginal product of labor for this firm.

Answer 1

The marginal product of labor when an eleventh worker is hired is
`10`units per worker, calculated using the change in total output and the change in the number of workers.

Step-by-step explanation:

To calculate the marginal product of labor for the firm, we will use the data provided about the production levels with varying numbers of workers. The marginal product of labor is defined as the additional output a firm produces when one more worker is added to the production process, assuming that all other inputs are held constant. Using the provided information, when the firm hires
`10` workers, it produces
`180` units of output, and with
`11` workers, it produces
`190` units of output.

The formula to find the marginal product (MP) is:

`MP = ∆TP / ∆L`

Where
`∆TP` represents the change in total product (output) and
`∆L`represents the change in the amount of labor (number of workers).

In this scenario:

• 
  `∆TP` (change in total product) =
  `190` units -
  `180` units =
  `10` units
• 
  `∆L` (change in labor) =
  `11` workers -
  `10` workers =
  `1` worker

So, the marginal product of labor is:

`MP = 10` units /
`1`worker =
`10` units per worker

Therefore, the marginal product of labor when the firm hires an eleventh worker is
`10` units per worker.