Asked by Blair Harrell on Jun 27, 2024
Verified
Refer to Table 18-7. Suppose the firm sells each box of envelopes that it produces for $5. What is the marginal profit of the fourth worker?
A) $18
B) $22
C) -$18
D) $415
Marginal Profit
The rise in earnings achieved by selling an extra unit of a product or service.
- Ascertain the marginal cost, marginal revenue product, and marginal profit in differing scenarios.
Verified Answer
AS
Aamir SaeedJul 03, 2024
Final Answer :
B
Explanation :
The marginal profit of the fourth worker is calculated by multiplying the marginal product of labor by the price per box and then subtracting the wage. For the fourth worker, the marginal product is 83 boxes, and each box sells for $5, so the total revenue generated by the fourth worker is 83 \times $5 = $415 . The wage of the fourth worker is $393. Therefore, the marginal profit is 415 - 393 = $22 .
Learning Objectives
- Ascertain the marginal cost, marginal revenue product, and marginal profit in differing scenarios.