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SSC SSC CHSL TIER-I Solved Paper Held on 11.01.2017

  • question_answer
    If hiring an extra worker in- creases a factory's output from 1000 to 1200 units per day, but the factory has to reduce the price of Its product from Rs. 25 to Rs. 24 per unit to sell the additional output, the marginal revenue product of the last worker is

    A)  Rs. 3800

    B)  Rs. 200

    C)  Rs. 4000                      

    D)  Rs. 100

    Correct Answer: A

    Solution :

    Marginal revenue product of labour (MRPL) is the extra revenue generated when an additional worker is employed. MRPL = marginal product of labour\[\times \] marginal revenue.
    According to the question, the initial revenue product generated is \[1000\times 25=\] Rs. 25,000 with the addition of one worker, the revenue product becomes  \[1200\times 24=\text{Rs}\text{.}\,28,800\]
    Marginal revenue product is simply the increase in total revenue from the additional worker = Rs. 28,800 - 25000 = Rs. 3,800


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