Marginal product of labor is the change in total product when labor is increased by one. Marginal Revenue Product (net of the cost of the other required inputs),
economics
Description
Second scenario: output price must be reduced to sell a greater quantity of output.
The table (below) gives the total output, per hour, for anywhere from 0 to 17 workers.
You need to determine how many workers should be hired at five different wage rates, ranging from $13/hour up to $25/hour. The wage rate includes all relevant benefits. To get to this answer you will need to calculate the marginal product of labor and the marginal revenue product of labor. You will be entering the values you obtain for the boldy outlined celles into the Moodle submission area.
Cost of the other (non-labor) inputs that go into a case (and would need to be increased if more labor was hired and output increased) = $13.00
Price received per case = Given below in table
Marginal product of labor is the change in total product when labor is increased by one.
Marginal Revenue Product (net of the cost of the other required inputs), when the output price changes, equals the change in total revenue (net of other input costs) from adding another worker. Calculate (P - $13)xtotal output. MRP is then the change in this when another worker is added.
Please note: A few of the table values are filled in. Use these to determine if your approach to the problem is correct.
