Bonita's Braidworks hires workers to braid hair. The store sells the service for $25 per customer. The marginal revenue product of this storeʹs fifth worker is $50. The marginal product of the fifth worker is

A) 0.5 braided customers.
B) 2 braided customers.
C) 25 braided customers.
D) indeterminate from this information.

Question

SAYALI GAWADE · Accepted Answer

Final Answer : B, Explanation :  The marginal revenue product (MRP) is calculated as the marginal product (MP) of the labor times the marginal revenue (MR), which in this case is the price per service ($25) since it's a perfectly competitive market. Given the MRP of the fifth worker is $50, and knowing the price per service is $25, we can calculate the MP as MRP/MR, which is $50/$25 = 2. Therefore, the marginal product of the fifth worker is 2 braided customers.

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