A Competitive Firm Sells Its Output for $30 Per Unit

question 208

Multiple Choice

A competitive firm sells its output for $30 per unit.The marginal product of the 10th worker is 20 units of output per day; the marginal product of the 11th worker is 16 units of output per day.The firm pays its workers a wage of $150 per day.For the 11th worker,the value of the marginal product of labor is

• A) $120.
• B) $480.
• C) $600.
• D) $2,400.

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Definitions:

CVP Graph

A visual representation of the Cost-Volume-Profit analysis, illustrating the relationships between an organization's costs, sales volume, and profit.

Operating Leverage

The extent to which a company uses fixed costs in its operations, affecting its potential for higher profits or losses with changes in sales volume.

Selling Price

The amount of money for which something is sold to a buyer, after considering production, marketing, and distribution costs.

Fixed Cost

Fixed costs, including rent, salaries, and insurance, stay the same no matter how much is produced or sold.