Suppose that the production of a certain product only requires one input, labor, and that the additional production diminishes by half after the last input.On the other hand, the demand of the good can be described using the equationQ = 10000 – P/10.The total product of the second unit of labor is 3,000 unite. Finally, each additional worker requires P1,000,000. Given the following information, answerthe following questions:What is the marginal revenue product of the third unit of labor?Answer: 500How would you characterize the marginal revenue product of labor?How would you characterize the labor market that this firm faces?

Answered: Suppose that the production of a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

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Suppose that the production of a certain product only requires one input, labor, and that the additional production diminishes by half after the last input.
On the other hand, the demand of the good can be described using the equation
Q = 10000 – P/10.
The total product of the second unit of labor is 3,000 unite. Finally, each additional worker requires P1,000,000. Given the following information, answer
the following questions:
What is the marginal revenue product of the third unit of labor?
Answer: 500
How would you characterize the marginal revenue product of labor?
How would you characterize the labor market that this firm faces?

Expert Solution

Step 1

1.500

2. The marginal product of labor (MRPL) is the adjustment of income that outcomes from utilizing an extra unit of work, holding any remaining data sources steady. Since the MRPL is equivalent to the minimal result of work times the cost of result, any factor that influences either MPL or cost will influence the MRPL.

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