What is the difference between marginal product and marginal revenue product? Which one should the firm...
What is the difference between marginal product and marginal revenue product? Which one should the firm use in deciding how many to hire?
Homework Answers
Marginal product
Marginal product is also known as marginal physical productivity. it is an factor of production that changes the output by increasing one more input of particular input by keeping all other input constant. It can be expressed as
Marginal product= change in output by increasing input/change in firm unit of input
=ΔY/ΔX
Marginal revenue product
Marginal revenue product is also known as the marginal value product. marginal revenue product is defined as the additional market value of one extra unit of output. The marginal revenue product can be obtained by multiplying marginal physical product by marginal revenue.
Marginal revenue product=marginal physical product ×marginal revenue
=MPP × MR
where MPP is the marginal physical product
MR is the marginal revenue
The firm should use marginal product to decide how many to hire . because marginal product is obtained by increasing the number of input. this input may be labours. that means by increasing the number of labour by one unit and finding out the total increase in the output. thus providing hire depends on marginal product.
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Part 1 At a market price of $7, what is the Marginal Revenue for this firm? At a market price of...
Part 1
At a market price of $7, what is the Marginal Revenue for this
firm?
At a market price of $7, what is the Average Revenue for this
firm?
At a price of $7 how many units will this firm produce in the
short run to maximize profit? (Round off your answer to the nearest
100 units)
What is the cost per unit? (See ATC)
What will be its profit or loss per unit?
Part 2
At a market...
42. If the price of output is $4 per unit, what is the marginal revenue product...
42. If the price of output is $4 per unit, what is the marginal revenue product for the fourth worker in a competitive labor market? A. $4 B. $8 C. $12 D. $56 43. If this profit-maximizing firm sells its output in a competitive market for $4 per unit and hires labor in a competitive market for $8 per hour, then this firm should hire A. one worker. B. two workers. C. three workers D. four workers. 44. The opportunity...
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What is the difference between Gross Margin, Profit, and Revenue? Which one is the largest, and which one is the smallest?
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Ques. (a) Find the marginal revenue of a firm that sells a product at the price...
Ques. (a) Find the marginal revenue of a firm that sells a product at the price of Rs. 10 and the price elasticity of the demand for the product it sells is (-)2. (b) Find the price elasticity of demand of another firm that sells a product at P = Rs 16 and MR = Rs. 12. (c) What would be the marginal cost of the firm is in part b.
If marginal cost for a firm exceeds marginal revenue, what can be said about the firm?...
If marginal cost for a firm exceeds marginal revenue, what can be said about the firm? Select one: O a. It should increase the level of production to maximize its profit. O b. It must be experiencing losses. O c. It is most likely to be at a profit-maximizing level of output. O d. It may still be earning a profit.
The graph shows the demand (D), marginal cost (MC), marginal revenue (MR), and average variable cost (AVC) curves for a firm that is a price maker for its product.
The graph shows the demand (D), marginal cost (MC), marginal revenue (MR), and average variable cost (AVC) curves for a firm that is a price maker for its product. The MC and AVC curves slope upward because one of the materials used to make the product is scarce. The firm can obtain a small supply cheaply, but additional units get more and more expensive. Additionally, the firm faces no fixed costs. If the firm is able to practice price discrimination, using...
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Table 2 Units of Labor Total Product Imperfect Competition Marginal Marginal Product Total Revenue Product Price Revenue Product IIIIIII ||| 3. How many workers will the firm hire if the market wage rate is $27.95? 4. How many workers will the firm hire if the market wage rate is $19.95? 5. Compare the hiring practices of the firm under Pure Competition and Imperfect Competition. In which situation is the demand for labor more elastic?
Complete the table. The price of output is $10.(1 point) Units of Total Product Marginal Product Marginal Revenue Labor from labor from Labor Product from Labor 0 10 20 2 80 150 120 90 80 | 40 10 20 11 5 How many workers should this firm hire if the price of labor cost is $400? Write the rule you used to determine the number of workers. (2 points) b. Why does marginal product eventually fall? (1 point) c. Illustrate...
Part 1
At a market price of $7, what is the Marginal Revenue for this
firm?
At a market price of $7, what is the Average Revenue for this
firm?
At a price of $7 how many units will this firm produce in the
short run to maximize profit? (Round off your answer to the nearest
100 units)
What is the cost per unit? (See ATC)
What will be its profit or loss per unit?
Part 2
At a market...
42. If the price of output is $4 per unit, what is the marginal revenue product for the fourth worker in a competitive labor market? A. $4 B. $8 C. $12 D. $56 43. If this profit-maximizing firm sells its output in a competitive market for $4 per unit and hires labor in a competitive market for $8 per hour, then this firm should hire A. one worker. B. two workers. C. three workers D. four workers. 44. The opportunity...
1) Quantity (2) Quantity (3) Product (4) Marginal (5) Marginal of Factor X of Output Price Physical Product Revenue Product O 20 $24 1 28 $24 (c) 2 34 $24 (A) (D) 3 37 $24 (B) (E) 4 38 $24 (E) If firm is a factor price taker and ongoing price of Factor X is $20, how many units of Factor X this firm should hire to maximize profit? O 2 4 O 1 3
If marginal cost for a firm exceeds marginal revenue, what can be said about the firm? Select one: O a. It should increase the level of production to maximize its profit. O b. It must be experiencing losses. O c. It is most likely to be at a profit-maximizing level of output. O d. It may still be earning a profit.
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