Suppose that a firm's only variable input is labor. The firm increases the number of employees from four to five, thereby causing weekly output to rise by four
units and total costs to increase from $3 comma 000
per week to $3 comma 300
per week.
Part 2
What is the marginal product of the fifth worker?
The marginal product of labor is the change in output resulting from a one-unit increase in labor. In this case, when the firm increases the number of employees from four to five, the weekly output rises by four units.
Therefore, the marginal product of the fifth worker is four units.
To calculate the marginal product of the fifth worker, we need to determine the additional output that is produced when the firm increases its number of employees from four to five.
Given that the weekly output increased by four units, the additional output produced by the fifth worker is four units.
Therefore, the marginal product of the fifth worker is four units.
To calculate the marginal product of the fifth worker, you need to determine the additional output produced as a result of hiring that worker.
Given the information provided, we know that the firm's weekly output increased by four units after hiring the fifth worker. Therefore, the marginal product of the fifth worker is four units.
To arrive at this answer, you should consider these steps:
1. Start by understanding the concept of marginal product, which represents the increase in output resulting from the addition of one more unit of the variable input (in this case, labor).
2. Calculate the change in output by subtracting the original output (when there were four workers) from the new output (when there were five workers). In this case, the change is four units.
3. Put it all together by concluding that the marginal product of the fifth worker is indeed four units, as it represents the additional output generated by hiring that specific worker.
It's important to note that the marginal product can vary depending on the level of input and its relationship to the output. In this case, the marginal product of the fifth worker is simply the observed increase in units of output.