Differentiate MRP in a purely competitive market from MRP in an imperfectly competitive market through the use of the table. CHAPTER 16 TheTABLE 16.2 The Demand for Labor: Imperfect Competition in the Sale of the Product(1)Units of(2)Total Product(Output)(3)MarginalProduct (MP)(4)ProductPrice(5)Total Revenue,(6)Marginal RevenueProduct (MRP)Resource(2) x (4)$2.80%$4172.60$18.2018.20213:13.002.4031.2018:2.2039.60:8.40222.0044.00:4.40251.852.2546.2526271.751.0047.257281.6546.20-1.05Similarly, the third worker adds 5 units to total product, and these units are worth$2.20 each, or $11 total. But to sell these 5 units, the firm must take a 20-cent price cut on the13 units produced by the first two workers. So the third worker's MRP is only $8.40 [= $11 –(13 x 20 cents)]. The numbers in column 6 reflect such calculations.In Figure 16.2 we graph the MRP data from Table 16.2 and label it "D = MRP (imperfect bl CHAPTER 16 The DemTABLE 16.1 The Demand for Labor: Pure Competition in the Sale of the Product(6)Marginal RevenueProduct (MRP)(4) (2)(1)(2)Total Product(Output)(3)MarginalProduct (MP)(4)ProductPrice(5)Total Revenue,Units ofResource(2) x (4)$2$0,$141214213:261231823610寸2244325250246.27541228256Product Price The derived demand for a resource depends also on the price of the product itproduces. Column 4 in Table 16.1 adds this price information. Product price is constant, in thiscase at $2, because the product market is competitive. The firm is a price taker and cannot there-fore sell at any price higher than $2 per unit.Multiplying column 2 by column 4 provides the totalrevenue data of column 5 From tho00

Perfectly competitive market refers to that market structure that contains infinite number of buyers…

Answered: Differentiate MRP in a purely…

Differentiate MRP in a purely competitive market from MRP in an imperfectly competitive market through the use of the table.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Differentiate MRP in a purely competitive market from MRP in an imperfectly competitive market through the use of the table.

CHAPTER 16 The
TABLE 16.2 The Demand for Labor: Imperfect Competition in the Sale of the Product
(1)
Units of
(2)
Total Product
(Output)
(3)
Marginal
Product (MP)
(4)
Product
Price
(5)
Total Revenue,
(6)
Marginal Revenue
Product (MRP)
Resource
(2) x (4)
$2.80
%$4
1
7
2.60
$18.20
18.20
2
13:
13.00
2.40
31.20
18:
2.20
39.60:
8.40
22
2.00
44.00:
4.40
25
1.85
2.25
46.25
2
6
27
1.75
1.00
47.25
7
28
1.65
46.20
-1.05
Similarly, the third worker adds 5 units to total product, and these units are worth
$2.20 each, or $11 total. But to sell these 5 units, the firm must take a 20-cent price cut on the
13 units produced by the first two workers. So the third worker's MRP is only $8.40 [= $11 –
(13 x 20 cents)]. The numbers in column 6 reflect such calculations.
In Figure 16.2 we graph the MRP data from Table 16.2 and label it "D = MRP (imperfect

bl CHAPTER 16 The Dem
TABLE 16.1 The Demand for Labor: Pure Competition in the Sale of the Product
(6)
Marginal Revenue
Product (MRP)
(4) (2)
(1)
(2)
Total Product
(Output)
(3)
Marginal
Product (MP)
(4)
Product
Price
(5)
Total Revenue,
Units of
Resource
(2) x (4)
$2
$0,
$14
1
2
14
2
13:
26
12
3
18
2
36
10
寸
22
44
3
25
2
50
2
4
6.
27
54
1
2
28
2
56
Product Price The derived demand for a resource depends also on the price of the product it
produces. Column 4 in Table 16.1 adds this price information. Product price is constant, in this
case at $2, because the product market is competitive. The firm is a price taker and cannot there-
fore sell at any price higher than $2 per unit.
Multiplying column 2 by column 4 provides the totalrevenue data of column 5 From tho00

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