Bonita's Braidworks Hires Workers to Braid Hair

question 147

Multiple Choice

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.

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Definitions:

Rising Prices

A situation in an economy where the general level of prices for goods and services is increasing, often referred to as inflation.

Holding Gains

Holding gains are the increased values of assets that a company holds, realized when the asset is sold or revalued.

FIFO Cost Flow

An inventory valuation method where the cost of the earliest goods purchased are the first to be recognized as cost of goods sold.

Net Income

This refers to the amount of money a company earns after subtracting all its expenses, taxes, and costs from its total revenue.