CA Foundation · Business Economics · Theory of Production and Cost
A firm in Rajkot employs 6 workers and produces 114 units. Its average product at 5 workers is 20 units. What is the marginal product of the 6th worker?
The marginal product of the 6th worker is 14 units. Total product with 5 workers is 5 times 20, which is 100 units. Adding the sixth worker raises output to 114 units, so the extra output is 14 units.
- A19 units
- B14 unitsCorrect
- C24 units
- D6 units
Explanation
TP at 5 workers = 5 × 20 = 100 units. MP of the 6th worker = 114 - 100 = 14 units. The figure 19 comes from the average product at 6 workers (114/6), which is not the marginal product.
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