Problem
The following table shows productivity for different units of labor:
Labor Units Total Product
1 12
2 21
3 27
4 32
5 36
(A) If the firm's product sells for a constant $2.00 per unit, what is the marginal revenue product of the third unit of labor?
(B) If the firm's product sells for a constant $2.00 per unit and the wage rate is $8, how many units of labor will this firm hire?
(C) If the firm can sell 12 units of its product at $1.00 per unit and and 21 units at $0.80 per unit, what is the marginal revenue product of the second unit of labor?