Refer to Figure 18-1. Suppose the firm sells its output for $13 per unit, and it pays each of its workers $165 per day. When the number of workers increases from 2 to 3, the

A) marginal revenue is $195 per unit of output, and the marginal cost is $165 per unit of output.
B) value of the marginal product of labor is $2,475, and the marginal cost per unit of output is $165.
C) value of the marginal product of labor is $195, and the marginal cost per unit of output is about $11.
D) firm's profit increases.

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Alayna Tolison · Accepted Answer

Final Answer : C, Explanation :  The value of the marginal product of labor (VMPL) is calculated by multiplying the marginal product of labor (the additional output produced by the additional worker) by the price of the output ($13 per unit). If the output increases by 15 units when the third worker is hired (as an example, since the exact output increase is not provided), the VMPL would be 15 units * $13/unit = $195. The marginal cost per unit of output is the additional cost of hiring the worker ($165) divided by the additional output produced by that worker (15 units, as an example), which equals $11 per unit.

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