Question

Lupita grows cantaloupes in central Florida and is in a perfectly competitive market. The marginal physical product of labor is 10 units while the price per unit is $2. What is the marginal revenue product of labor of Lupita’s farm? $2 $20 $5 $10 $12

Answer 1

$20

Step-by-step explanation:

The marginal revenue product of labor can be defined as the additional amount in revenue made when a single employee is added to the number of employees.

Mathematically, The marginal revenue product of a worker is equal to the product of the marginal product of labor (MPL) and the marginal revenue (MR) of output, given by MR×MP: = MRPL

According to this question, to calculate the marginal product of labor, we simply multiply the price per unit by the marginal product of labor.

This equals: 10 * $2 = $20