Asked by Franchezka Mendoza on Jun 22, 2024
Verified
Assuming labor is the only variable factor of production, production of a good will not occur
A) as long as the marginal revenue product of labor is positive.
B) if society values a good less than it costs firms to hire the workers to produce the good.
C) as long as the productʹs price is less than the marginal revenue product of labor.
D) if the marginal cost of a unit of output equals the marginal revenue product of labor.
Marginal Revenue Product
is the additional revenue generated by employing one more unit of input, such as labor or capital, in the production process.
Variable Factor
An input in production that can be varied in the short term, such as labor or raw materials, in contrast to fixed factors like machinery or land.
- Learn the significance of market competition and how it influences factor markets and prices.
Verified Answer
JH
Jaiden HolcombJun 25, 2024
Final Answer :
B
Explanation :
If society values a good less than it costs firms to hire the workers to produce the good, firms will not produce the good because it would not be profitable. This is because the revenue generated from selling the good would not cover the cost of labor, leading to a loss.
Learning Objectives
- Learn the significance of market competition and how it influences factor markets and prices.