The marginal revenue product can be expressed as the:
A) additional revenue received from selling one more unit of product.
B) increment to revenue received from one additional unit of input hired.
C) marginal physical product of an input times the average revenue received from the sale of the product.
D) average physical product of the input times the marginal revenue received from the sale of the final product.

Question

Quizplus · Accepted Answer

The marginal revenue product (MRP) is the additional revenue generated by one more unit of input hired. Therefore, the best choice is B. Option A is the definition of marginal revenue, not MRP. Option C is incorrect as it combines the marginal physical product with average revenue instead of marginal revenue. Option D is incorrect as it multiplies the average physical product with marginal revenue instead of marginal revenue product.

The Marginal Revenue Product Can Be Expressed as The