BuyFind

Exploring Economics

8th Edition
Robert L. Sexton
Publisher: SAGE Publications, Inc
ISBN: 9781544336329
BuyFind

Exploring Economics

8th Edition
Robert L. Sexton
Publisher: SAGE Publications, Inc
ISBN: 9781544336329

Solutions

Chapter
Section
Chapter 16, Problem 1P
Textbook Problem

The following table shows workers' Total Output each week on a perfectly competitive cherry farm. The equilibrium price of a pound of cherries is $4. Complete the Marginal Product of Labor and the Marginal Revenue Product of Labor columns in the table.

Chapter 16, Problem 1P, The following table shows workers' Total Output each week on a perfectly competitive cherry farm.

Expert Solution
To determine

The marginal product and the marginal revenue product of labor is to be completed in the table.

Explanation of Solution

Marginal product of labor is the change in total labor due to an addition of one more unit of labor.

Initial labor is q1 and initial output is Q1

So, the increase in labor by one more unit is q1+1 and the output is increased to Q2. So the marginal product of labor will be equal to MP = Q2- Q1

Marginal revenue = MPXP

The table will be completed using the above equations.

    Quantity of labor (q)Total Output(Q)Marginal product of labor (MP)Marginal revenue product of laborMRP = MP X $4
    0
    1250250$1000
    2600350$1400
    3900300$1200
    41125225$900
    51300175$700
    61450150$600
    71560110$440
Economics Concept Introduction

Marginal Product:

is defined as the change in the total output due to one unit change in the input.

Marginal Revenue:

is defined as the marginal product times the price of the product that is MP XP

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