A resource owner will supply resources up to the point where marginal resource cost is equal to marginal revenue product.

Question

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This statement is a well-established economic principle known as the "equimarginal principle" or "profit maximization rule" for resource allocation. When a resource owner reaches the point where their marginal resource cost (MRC), or the cost of producing an additional unit of the resource, is equal to their marginal revenue product (MRP), or the total revenue generated by employing an additional unit of the resource, they will maximize their profit or utility from resource use. This condition ensures that the resource owner is neither over-utilizing nor under-utilizing the resource and is allocating it efficiently.

A Resource Owner Will Supply Resources Up to the Point