What is the marginal product of the 3rd pound of rubber

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Reference no: EM13187695

Marginal revenue product is defined as the change in total revenue that results from the employment of an additional unit of a resource. A widget producer wishes to determine how the addition of pounds of rubber will affect its MRP and profits. See the table below, and answer each of the questions.

Pounds of rubber Number of widgets Price
(quantity of resource) (total product) of widgets ($)

0 0 -
1 20 12
2 35 10
3 45 8
4 50 6
5 53 4


a. The marginal product of the 3rd pound of rubber is _____.

b. The marginal revenue product of the 3rd pound of rubber is ____.

c. The price of rubber is $110 per pound. To maximize profit, the widget producer should produce _______.

d. The price of rubber is $110 per pound. To maximize profit, the widget producer should buy and use.

Reference no: EM13187695

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