A firm sells pairs of jeans. The market price for a pair of jeans is $30

Question

. With one worker the firm can make 9 pairs of jeans in an hour. With two workers the firm can make 19 pairs of jeans in an hour. What is the marginal revenue product of labor for the second worker?(1 point)
Responses

$840
per hour
840 dollars per hour

$270
per hour
270 dollars per hour

$300
per hour
300 dollars per hour

$570
per hour

Answer 1

To find the marginal revenue product (MRP) of labor for the second worker, we first need to calculate how much additional output is produced by hiring that second worker.

1. Calculate output with one worker:

   • Output with 1 worker = 9 pairs of jeans per hour.

2. Calculate output with two workers:

   • Output with 2 workers = 19 pairs of jeans per hour.

3. Calculate the marginal product of the second worker:
   \[ \text{Marginal Product (MP)} = \text{Output with 2 workers} - \text{Output with 1 worker} \] \[ MP = 19 - 9 = 10 \text{ pairs of jeans} \]

4. Calculate the marginal revenue product (MRP):
   MRP is calculated by multiplying the marginal product by the price of the product: \[ \text{MRP} = MP \times \text{Price per pair of jeans} = 10 \times 30 = 300 \text{ dollars per hour} \]

Thus, the marginal revenue product of labor for the second worker is $300 per hour.

The correct response is: $300 per hour.