Jeff Owns a Small Business Installing Home Security Systems Priced

question 354

Multiple Choice

Jeff owns a small business installing home security systems priced at $1,000 each. By himself, he can install four systems per month. If he hires an assistant, a total of ten systems can be installed. If he hires two assistants, a total of fifteen systems can be installed. Assuming that the price stays the same, what is the marginal revenue product of the first assistant and the marginal revenue product of the second assistant?

• A) $6,000; $5,000
• B) $6,000; $11,000
• C) $10,000; $11,000
• D) $10,000; $15,000

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Definitions:

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets, representing the premium paid for the company's reputation, customer base, or brand identity.

Separate Incorporation

A legal entity distinct from its shareholders or owners, recognized as such by law and capable of rights, privileges, and liabilities.

Parent Company

A company that holds sufficient shares in another business to dictate its management and operations through the power to influence or choose its board of directors.