A firm sells pairs of jeans. The market price for a pair of jeans $30. With one worker the firm can make 9 pairs of jeans in an hour. With two workers the firm can make 19 pairs of jeans in an hour. What is the marginal revenue product of labor for the second worker?
A. $270 per hour
B. $570 per hour
C. $840 per hour
D. $300 per hour
The marginal revenue product of labor is the additional revenue generated by adding one more unit of labor. In this case, the additional revenue generated by adding the second worker can be calculated by subtracting the revenue generated by the first worker alone from the revenue generated by both workers.
The revenue generated by the first worker alone is 9 pairs of jeans per hour * $30 per pair = $270 per hour.
The revenue generated by both workers is 19 pairs of jeans per hour * $30 per pair = $570 per hour.
So, the additional revenue generated by adding the second worker is $570 per hour - $270 per hour = $300 per hour.
Therefore, the marginal revenue product of labor for the second worker is $300 per hour.
D. $300 per hour