Purchase Solution

net marginal revenue product

Not what you're looking for?

Ask Custom Question

Will Truman and Associates, LLC is a successful Manhattan based law firm. Worker productivity at the firm is measured in billable hours, which vary between partners and associates.

Partner time is billed to clients at a rate of 250 per hour whereas associates time is billed at a rate of 125 per hour. On average each partner generates 25 billable hours per 40 hour work week with 15 hours spent on promotion, administrative and supervisory responsibilities. Associates generate an average of 35 billable hours per 40 hour workweek and spend 5 hours per week in administrative and training meetings. Variable overhead costs average 50 percent of revenues generated by partners and given supervisory requirements, 60 percent of revenue generates by associates.

A. Calculate the annual 50 workweek net marginal revenue product of partners and associates.
B. If partner earn 175000 and associates earn 70,000 per year does the company have an optimal combination of partners and associates? If not why not? make sure answer explicit and support any recommendations for change

7.9

Answer
a MRPp = 156,250, MRPa=87500
Please help show how this was calculated

Purchase this Solution
Solution Summary

The net marginal revenue products are determined.

Purchase this Solution
Free BrainMass Quizzes
Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

View More Free Quizzes
Related BrainMass Solutions

  • Demand function for Certified Product

    Demand function is given by P = 90 -0.003Q Total Revenue=TR=P*Q = (90-0.003Q)*Q = 90Q-0.003Q^2 Marginal Revenue=MR=d(TR)/dQ=90-0.006Q Marginal Cost=30 For profit maximization, Put MR=MC 90-0.006Q

  • Manufacturing

    What is the marginal product of the second worker? (b.) What is the marginal revenue product of the fourth worker? (c.) What is the marginal cost of the first worker? (d.)

  • net and cost revenue

    Ideally, a company would track how revenue increases with each new salesperson, and would then be able to determine the marginal revenue product of the last worker. This gives an accurate picture exactly how much the next worker will bring in.

  • Economic Marginal Cost Problem

    Then the marginal product of STS is 4*200 = 800, and the marginal revenue product of STS is 15*800 = $12000. the marginal product of CCT is 6*200 = 1200, and the marginal revenue product of STS is 15*1200 = $18000.

  • Cobb-Douglas production function

    Marginal revenue product is defined as the amount that an additional unit of the variable input adds to ____________. a. marginal revenue b. total output c. total revenue d. marginal product e. none of the above 6.

  • Regression Analysis

    If the price of the product is $10 per dozen, should the firm increase its advertising? b. If the advertising budget is fixed at $10,000, and per capita income equals $8,000, what is the firm's marginal revenue curve? c.

  • Relationship between sales revenue and advertising expenditures

    Marginal revenue from Advertising (marginal product of advertising) Please also briefly explain why the marginal revenue of advertising declines as the level of advertising increases (which is often the case in the real world).

  • Firm's Product Elastic

    The total revenue will be TR = P*Q = (3,000-40Q)*Q = 3,000 Q -40Q^2 And marginal revenue is the first derivative of TR: MR = dTR/dQ = 3,000 - 80 Q b. At what price is the demand for the firm's product elastic?

  • Market wage and the marginal wage

    The revenue from the output an additional worker adds to the firm's total output is termed the marginal revenue product of labor.

View More Related Solutions