**Marginal Revenue Product and Marginal Resource Cost Analysis**In the short run, a tool manufacturer has a fixed amount of capital. Labor is a variable input. The cost and output structure that the firm faces is depicted in the table below. Assume the product price is $4.Calculate the marginal revenue product (MRP) and the marginal resource cost (MRC), and then complete the table.**Instructions:** Enter your answers as whole numbers.| Quantity of Labor | Total Product | Marginal Product | Marginal Revenue Product ($) | Hourly Wage Rate ($) | Total Labor Cost ($) | Marginal Resource (Labor) Cost ($) ||-------------------|---------------|------------------|------------------------------|----------------------|----------------------|-----------------------------------|| 10 | 400 | | | 5 | 50 | || 11 | 420 | 20 | | 8 | 88 | || 12 | 438 | 18 | | 11 | 132 | || 13 | 454 | 16 | | 14 | 182 | || 14 | 468 | 14 | | 17 | 238 | || 15 | 480 | 12 | | 20 | 300 | |Calculate the following:- **The equilibrium wage rate ($) =**- **The equilibrium level of labor use =** ____ workers**Explanation of the Table:**- **Quantity of Labor:** The number of workers employed. - **Total Product:** The total output produced.- **Marginal Product:** The additional output produced by employing one more unit of labor.- **Marginal Revenue Product (MRP):** The additional revenue generated from selling the additional output produced by one more unit of labor.- **Hourly Wage Rate:** The wage paid per hour to each worker.- **Total Labor Cost:** The total cost of employing the labor force.- **Marginal Resource Cost (MRC):** The additional cost of employing one more unit of labor, also known as marginal labor cost.Complete the calculations based on these definitions and the given data.

We have to calculate The equilibrium wage rate and equilibrium level of labour use.

In the short run, a tool manufacturer has a fixed amount of capital. Labor is a variable input. The cost and output stru faces is depicted in the table below. Assume the product price is $4. Calculate the marginal revenue product and the marginal resource cost, and then complete the table.

In the short run, a tool manufacturer has a fixed amount of capital. Labor is a variable input. The cost and output stru faces is depicted in the table below. Assume the product price is $4. Calculate the marginal revenue product and the marginal resource cost, and then complete the table.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

**Marginal Revenue Product and Marginal Resource Cost Analysis**

In the short run, a tool manufacturer has a fixed amount of capital. Labor is a variable input. The cost and output structure that the firm faces is depicted in the table below. Assume the product price is $4.

Calculate the marginal revenue product (MRP) and the marginal resource cost (MRC), and then complete the table.

**Instructions:** Enter your answers as whole numbers.

| Quantity of Labor | Total Product | Marginal Product | Marginal Revenue Product ($) | Hourly Wage Rate ($) | Total Labor Cost ($) | Marginal Resource (Labor) Cost ($) |
|-------------------|---------------|------------------|------------------------------|----------------------|----------------------|-----------------------------------|
| 10 | 400 | | | 5 | 50 | |
| 11 | 420 | 20 | | 8 | 88 | |
| 12 | 438 | 18 | | 11 | 132 | |
| 13 | 454 | 16 | | 14 | 182 | |
| 14 | 468 | 14 | | 17 | 238 | |
| 15 | 480 | 12 | | 20 | 300 | |

Calculate the following:

- **The equilibrium wage rate ($) =**
- **The equilibrium level of labor use =** ____ workers

**Explanation of the Table:**

- **Quantity of Labor:** The number of workers employed.

- **Total Product:** The total output produced.

- **Marginal Product:** The additional output produced by employing one more unit of labor.

- **Marginal Revenue Product (MRP):** The additional revenue generated from selling the additional output produced by one more unit of labor.

- **Hourly Wage Rate:** The wage paid per hour to each worker.

- **Total Labor Cost:** The total cost of employing the labor force.

- **Marginal Resource Cost (MRC):** The additional cost of employing one more unit of labor, also known as marginal labor cost.

Complete the calculations based on these definitions and the given data.

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