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Assume labor is the only variable input and that an additional input of labor increases total output from 72 to 80 units. If the product sells for $6 per unit in a purely competitive market, the MRP of this additional worker is

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Answer:

$48

Explanation:

The computation of MRP of this additional worker is shown below:-

At 72 units, revenue earned = Number of units × Sold units

= 72 × $6

= $432

At 80 units, revenue earned is

= 80 units × $6 per unit

= $480

Marginal revenue product of the additional worker = At 80 units, revenue earned - At 72 units, revenue earned

= $480 - $432

= $48