Asked by Heather Hernandez on May 09, 2024
Verified
A firm's demand schedule for capital is
A) the marginal revenue product and marginal physical product schedule for capital.
B) neither the marginal revenue product schedule nor the marginal physical product schedule for capital.
C) the marginal revenue product schedule for capital.
D) the marginal physical product schedule for capital.
Demand Schedule For Capital
A table or graph showing the amount of capital that businesses wish to invest at different possible rates of interest.
Marginal Revenue Product
Incremental revenue obtained from the use of one more unit of a production input, such as labor or capital.
Marginal Physical Product
The additional output resulting from using one more unit of a physical input, holding all other inputs constant.
- Comprehend the principle of marginal revenue product and the methodology for its calculation.
- Acquire knowledge about the elements that determine the demand for labor and other resources.
Verified Answer
ML
Maleka Laster
May 13, 2024
Final Answer :
C
Explanation :
A firm's demand schedule for capital is the marginal revenue product schedule for capital. This schedule shows the additional revenue that a firm earns from using one more unit of capital. As the firm adds more units of capital, eventually the marginal revenue product will start to decrease, indicating that the firm should not use any more capital beyond that point.
Learning Objectives
- Comprehend the principle of marginal revenue product and the methodology for its calculation.
- Acquire knowledge about the elements that determine the demand for labor and other resources.