(Figure: MPP and MRP) Unit Price = $5
in the Table

question 39

Multiple Choice

(Figure: MPP and MRP) Unit Price = $5
In the table, in a competitive labor market, if the prevailing price of labor is $150, this firm should hire _____ workers.
$\begin{array}{|l|l|l|l|l|} \hline\text { Labor } & \text { Total } & \mathrm{MPP}_{L} &\text { Total } & \mathrm{MRP}_{L} \\& \text { Product } & & \text { Revenue } & \\& \text { (Q) } & & \text { (TR) } &\\ \hline & 35 & 35 & ? & \$ 175 \\\hline 2 & 75 & 40 & ? & \$ 200 \\\hline 3 & 105 & 30 & \$ 525 & ? \\\hline 4 & 130 & 25 & \$ 650 & ? \\\hline 5 & 150 & 20 & \$ 750 & ?\\\hline\end{array}$

• A) two
• B) three
• C) four
• D) five

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Definitions:

Contribution Format

A type of income statement where costs are separated into variable and fixed categories, highlighting the contribution margin.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, determined by the proportion of fixed costs in a company's cost structure.

Sales Increase

The rise in the volume or amount of sales over a specific period, reflecting business growth.

Net Operating Income

The profit generated from a company's core business operations after deducting all operating expenses except for interest and taxes.