Question

Problem Set - Module 13 Help Save & Exit Submit Marginal Revenue Product Exercise 2 (Algo) Pierre produces wedges of aged cheddar cheese and sells them for $14 each. The table below shows the labor productivity for Pierre's cheese-making business. Fill in the missing values. Assume this is a perfectly competitive market. points Instructions: Round your answers to one decimal place. Skipped Marginal Revenue Product (dollars) eBook 9 Pierre's Cheese Business and Revenues Labor Total Product wedges Marginal Product Price Total Revenue (workers) of cheese) (wedges of cheese) (dollars) (dollars) 0 $14 50 10 1 4 280 34 14 46 6 1 0 644 57 14 798 4.5 14 3 141 .008 75 1.5 14 8 84 Print 63 References

Answer 1

Refer the attached table

| | | Q | MP | P | TR 1 MRP | 0 0 - $ 14 $ - | 2 20 10 $ 14$ 280 $ 140 | 4 | 34 | 7 $ 14 $ 476 $ 98 | 6 466 $ 14 $ 644 $ 84 | 8 | 57 | 5.5 $ 14 $ 798 $ 77 | 1066 4.5 $ 14$ 924 $ 63 | 12 | 72 | 3 $ 14 $ 1,008 $ 42 | 14 75 1.5 $ 14 $ 1,050 $ 21

We can determine the missing values as follows

MP = 10 (at L = 2)

$\large MP_L = \frac{\triangle Q}{\triangle L}$

$\large \implies 10 = \frac{Q_2 - 0 }{2 - 0}$

$\large \implies Q_2 = 20$

So, Q = 20 (at L = 2)

Like this we can determine the Quantity.

As well as Marginal product of labour.

Total revenue = Price × Quantity

Marginal revenue product = Marginal revenue × Marginal product

Here price is constant therefore Price = Marginal revenue

MRP = P × MP

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