The marginal revenue product of input a is equal to the net marginal revenue of input a multiplied by the marginal product of input
a.
True

Question

Quizplus · Accepted Answer

This statement is true based on the formula for calculating the marginal revenue product (MRP): MRP = MPP x MRC, where MPP is the marginal physical product of input a, and MRC is the marginal revenue (or price) of the output produced by input a. Net marginal revenue refers to the additional revenue gained from using one more unit of input a, after accounting for any additional costs (such as labor or materials) required to produce that unit. Therefore, multiplying net marginal revenue by MPP will give us the MRP of input a.

The Marginal Revenue Product of Input a Is Equal to the Net