The Bright Future of Acme Company

What is the marginal revenue product of labor for Acme Company?

For Acme Company, the marginal product of labor is 20 and the price of Acme's output is $10.

Answer:

The marginal revenue product of labor for Acme Company is $200.

Acme Company is in a unique position as a perfect competitor in its input markets and a monopolist in its output market. This means the company has significant control over its pricing and revenue generation. Despite this, Acme Company values its workforce and recognizes the importance of labor in its production process.

The marginal revenue product of labor (MRP) is a crucial metric for Acme Company to understand the additional revenue it can generate from hiring an extra unit of labor. With a marginal product of labor at 20 and a fixed output price of $10, the MRP calculation is straightforward.

By multiplying the marginal product of labor by the price of output, Acme Company arrives at an MRP of $200. This figure signifies the value that each additional unit of labor brings to the company's revenue stream. The future looks promising for Acme Company as it continues to leverage its position in the market to drive growth and success.