Asked by Feryal Rushdan on May 07, 2024
Verified
For a firm selling its product in an imperfectly competitive market,the marginal revenue product of labor can be found by:
A) adding marginal product to total product as one more unit of labor is employed.
B) adding marginal revenue to total product as one more unit of labor is employed.
C) multiplying marginal product by product price.
D) multiplying marginal product by marginal revenue.
Marginal Revenue Product
The additional revenue generated from employing an additional unit of a resource or factor of production.
Imperfectly Competitive
Refers to market structures that do not meet the criteria of perfect competition, involving elements like monopolies or oligopolies.
Marginal Product
The additional output that is produced by adding one more unit of a specific input, keeping other inputs constant.
- Acquire knowledge on the concept of marginal revenue product (MRP) and its impact on employment decisions.
Verified Answer
ZK
Zybrea KnightMay 08, 2024
Final Answer :
D
Explanation :
The marginal revenue product of labor is calculated by multiplying the marginal product (the additional output produced by an additional unit of labor) by the marginal revenue (the additional revenue generated from selling that additional output). This reflects the additional revenue a firm earns by employing one more unit of labor, considering the firm does not have price-setting power and faces a downward-sloping demand curve.
Learning Objectives
- Acquire knowledge on the concept of marginal revenue product (MRP) and its impact on employment decisions.