Hey I just had a question regarding how to calculate VMPL (marginal revenue product). When looking for a specific formula, I got a whole bunch of different one's and it didn't seem like I had enough information to find any. I'm supposed to find it for the 5th worker who allows for 72 products to be made per day. The market wage is $90 per worker per day and each product is sold at $10 each. Is there anything else I need? That is all the question really gave me..I'd include a picture of the chart but it won't let me attach pictures here. thanks
To calculate the VMPL (marginal revenue product), you will need the following information:
1. The number of units produced due to the addition of the 5th worker (72 products per day).
2. The market wage rate for each worker ($90 per worker per day).
3. The price at which each product is sold ($10).
The formula for VMPL is calculated by multiplying the marginal product of labor (MPL) with the price of the output (P), which is also equal to the marginal revenue (MR):
VMPL = MPL * P
To find the MPL, you need to calculate the change in production due to the addition of the 5th worker. Unfortunately, without a picture or more information about the production function, it is not possible to find the specific MPL value. However, I can provide you with an example of how to calculate it once you have the necessary information.
Once you have the MPL for the 5th worker, you can calculate the VMPL using the formula above.