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Q.28-1

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Economics Today
Found in: Page 645

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Short Answer

The following table depicts the output of a firm that manufactures computer printers. The printers sell for $ 100each.

Labor Input

(workers per week)

Total Output ( printers per week)
10 200
11 218
12 234
13 248
14 260
15 270
16 278

Calculate the marginal product and marginal revenue product at each input level above 10 units.

The change in total physical output divided by the change in labor input equals marginal physical product.

See the step by step solution

Step by Step Solution

step 1 Introduction

The production of a company that makes computer printers is shown in the table below.

The marginal physical product and marginal revenue product have been determined.

Labor Input

(workers per week)

Total Physical

Output

(printers per week)

Marginal Physical

Product

Marginal Revenue Product

($)

10200--
11218181800
12234161600
13248141400
14260121200
15270101000
162788800

The Labor Input, Total Physical Output, Marginal Physical Product (MPP), and Marginal Revenue Product are all represented in the table above (MRP).

step 2    Explanation

  • The change in total physical output divided by the change in labor input equals marginal physical product.
  • The price into MPP equals the marginal revenue product.
  • The printer costs $100per unit in this case.

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