Scenario 14.1: You Are the Manager of a Firm Producing Green Chalk

question 130

Multiple Choice

Scenario 14.1:
You are the manager of a firm producing green chalk. The marginal product of labor is:
MP_L = 24L^-1/2
Suppose that the firm is a competitor in the green chalk market. The price of green chalk is $1 per unit. Further suppose that the firm is a competitor in the labor market. The wage rate is $12.00 per hour.
-Given the information in Scenario 14.1, what is the marginal revenue product of labor?

• A) 0.5L^-1/2
• B) 2L^-1/2
• C) 12L^-1/2
• D) 24L^-1/2