Marginal cost can be expressed as the ration of the price of labor and the Marginal Product of Labor
A) only when labor is held constant.
B) only when labor is the only variable input.
C) wether labor is held constant or not.
D) never.

Question

Quizplus · Accepted Answer

Marginal cost can be expressed as the ratio of the price of labor to the Marginal Product of Labor (MPL) only when labor is the only variable input. This is because the marginal cost formula, in its simplest form, considers changes in total cost resulting from producing one more unit of output, which directly relates to the efficiency (MPL) of the variable input, assuming other inputs are fixed.

Marginal Cost Can Be Expressed as the Ration of the Price