Economics (AS & A Level) · May / June 2021 · Paper 31 · Question 17

A firm operates under perfect competition in both product and factor markets with labour as the only variable factor input. In the diagram, the line JK shows the relationship between the marginal physical product of labour and the hours worked. When the marginal revenue of the product is $1.60, the firm uses 3000 hours of labour. What is the hourly wage?

1. A$0.40
2. B$2.40
3. C$5.60
4. D$6.40

As printed in the paper