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28 December, 17:41

A firm is a competitive seller of output at amarket price of $3. The only resource itrequires to create its product is labor, which itpurchases competitively at a wage rate of $6per hour. The last worker it employs increasestotal output from 36 to 40 units per hour. What is the marginal revenue product for thisworker? (A) $3

(B) $6

(C) $12 (D) $24

(E) $40

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  1. 28 December, 17:45
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    B. $6

    Explanation:

    Marginal revenue for the worker = change in wage : change in quantity output

    Change in wage = (40*$6) - (36*$6) = $240 - $216 = $24

    Change in quantity output = 40 - 36 = 4

    Marginal revenue for the worker = $24 : 4 = $6
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