If the Marginal Revenue Product of the Fifth Worker Hired

question 164

Multiple Choice

If the marginal revenue product of the fifth worker hired by a firm is $15 and the price of the last unit of output produced is $5, then the marginal product of the fifth worker is

• A)15 units of output if the product market is perfectly competitive
• B)3 units of output if the product market is perfectly competitive
• C)45 units of output if the product market is perfectly competitive
• D)5 units of output if the product producer is a price searcher
• E)15 units of output if the product producer is a price searcher

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Definitions:

Entry Barriers

Obstacles that prevent new competitors from easily entering an industry or area of business, including high startup costs, licensing requirements, and access to technology.

Zero Economic Profit

A situation where a firm's total revenue is exactly equal to its total opportunity costs, indicating no excess returns over the cost of capital.

Long Run

A period in which all factors of production and costs are variable, allowing for adjustments in production to meet changes in the market or economy.

Price-taker Market

A market condition where individual buyers or sellers have no power to influence the price of the good or service, typically in a perfectly competitive market.