• Current revenue: $8250 per month
• Projected revenue with new pilot: 9500dollars per month
• Marginal revenue (MRP_L) = Projected revenue - Current revenue
• MRP_L = 9500 - 8250 = 1250 dollars

Supplemental Knowledge

The Marginal Revenue Product of Labor (MRP_L) is a concept in microeconomics that measures the additional revenue generated by employing one more unit of labor. It is calculated by taking the change in total revenue that results from hiring an additional worker.
In this case, Ramone's Drones Inc. wants to determine the MRP_L for hiring an additional pilot. The formula for MRP_L is:
\[\text { MRP} _ L = \text { Change in Total Revenue} \]
To find the change in total revenue, subtract the current revenue from the projected revenue after hiring the new pilot:
\[\text { Change in Total Revenue} = \text { Projected Revenue} - \text { Current Revenue} \]

Knowledge in Action

Assume you run a small bakery and are considering hiring another baker to meet increased demand. Your current monthly earnings stand at $10,000; with one more baker added, earnings could potentially jump up to $12,000. Using marginal revenue product of labor analysis helps business owners make informed decisions when expanding workforce based on potential revenue increases.

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