In a ceramic pottery unit, 8 craftsmen are each paid Rs 900 per day, and when a 9th craftsman is hired at Rs 950 per day, all 9 craftsmen must now be paid Rs 950 per day. Based on this wage change, what is the marginal resource (labour) cost of hiring the 9th craftsman for the firm?

Introduction / Context:
This question tests the concept of marginal resource cost in labour markets, especially when a firm has some wage setting power and must pay a higher wage to all workers when it hires an additional worker. Such a situation is common in monopsony type labour markets where the firm faces an upward sloping labour supply curve and the cost of hiring one more worker is more than just that worker's own wage. Understanding this helps learners see why firms consider the extra cost of an additional employee rather than just the quoted wage.

Given Data / Assumptions:

• The pottery unit initially employs 8 craftsmen.
• Each of the 8 craftsmen is paid Rs 900 per day.
• A 9th craftsman is willing to work only if the wage is Rs 950 per day.
• If the 9th craftsman is hired, all 9 craftsmen must be paid Rs 950 per day.
• Marginal resource cost is the increase in total wage cost due to hiring one extra worker.

Concept / Approach:
Marginal resource cost (also called marginal factor cost) is defined as the change in total wage cost when an additional unit of labour is hired. In a competitive labour market with a constant wage, marginal resource cost equals the wage. However, when wages rise for all existing workers after hiring one more worker, the marginal resource cost is much higher than the wage of just the last worker. The correct method is therefore to compute the total wage bill before and after hiring the 9th craftsman and then find the difference between these two totals.

Step-by-Step Solution:
Step 1: Calculate initial total wage cost when 8 craftsmen each earn Rs 900 per day. Total wage cost with 8 craftsmen = 8 * 900 = Rs 7,200. Step 2: After hiring the 9th craftsman, the wage for all 9 craftsmen becomes Rs 950 per day. New total wage cost = 9 * 950 = Rs 8,550. Step 3: Compute the marginal resource cost as the increase in total wage cost. Marginal resource cost = Rs 8,550 − Rs 7,200 = Rs 1,350. Step 4: Match this value with the closest option given in the question.

Verification / Alternative check:
Another way to check is to see how much extra the firm pays for each of the original 8 workers plus the wage of the 9th worker. The wage increase per existing worker is Rs 50 (from 900 to 950), which applied to 8 workers adds Rs 400. The 9th craftsman is paid Rs 950. So the extra cost becomes Rs 400 + Rs 950 = Rs 1,350, which matches the earlier calculation. This cross check confirms that our marginal resource cost calculation is correct.

Why Other Options Are Wrong:
Option A (Rs 1,530) is incorrect because it does not match the actual increase in total wage cost and likely comes from an incorrect calculation of wage differences. Option B (Rs 1,050) ignores either the extra payment to all previous workers or the correct total difference between wage bills. Option C (Rs 50) wrongly considers only the additional wage demanded by the 9th craftsman above the old wage, ignoring the increased payment to the original 8 workers. Only Rs 1,350 reflects the true rise in the firm's labour cost due to hiring the 9th worker.

Common Pitfalls:
A common mistake is to treat the marginal resource cost as only the wage of the last worker, which would be Rs 950, or to consider only the increase in wage of the 9th craftsman over the original wage, which is Rs 50. Students often forget that in monopsony like situations, a higher wage must be paid to all workers when one more worker is hired. Another pitfall is mixing up total wage and marginal wage and failing to compute total wage bills before and after hiring. Careful reading of the question and clear use of the definition of marginal resource cost help avoid these errors.

Final Answer:
The marginal resource (labour) cost of hiring the 9th craftsman is Rs 1,350.