Rosie's Flower Shop sells bouquets of roses for $15 each. If Rosie hires 10 workers, she can sell 500 bouquets per week. If she hires 11 workers, she can sell 560 bouquets per week. Rosie pays each of her workers $400 per week. Which of the following is correct? A. For the 11th worker, the marginal profit is $500. B. For the 11th worker, the marginal revenue product is $500. C. The firm is maximizing its profit. D. If the firm is employing 11 workers, then its profit would increase if it cut back to 10 workers.

The correct answer to this question is A) with the addition of 11th worker, the marginal profit (for 11th worker) of Rosie's flower shop would be $500.

Explanation:

Marginal profit can be defined as the additional amount of profit that a company earns because of an additional unit that had been produced.

Here we can calculate what marginal profit would be for the 11th worker as-

Workers Selling price Cost price Profit

10 $7500 (500 x $15) $4000 (10 x $400) $3500

11 $8400 (560 x $15) $4400 (11 x $400) $4000

So from the given above information we can say that if we take out the marginal profit for 11th worker it would be $500 ($4000 - $3500).