The marginal revenue product of labor is equal to

Question

Quizplus · Accepted Answer

The marginal revenue product of labor is the additional revenue generated by hiring one more unit of labor. It is calculated by multiplying the marginal physical product of labor (the additional output generated by hiring one more unit of labor) by the marginal revenue of the output (the additional revenue generated by selling one more unit of output). Therefore, choice A is the correct answer. Choice B is incorrect because it combines the change in quantity of labor with the change in total revenue, which is not relevant for calculating the marginal revenue product of labor. Choice C is also incorrect because it divides the change in total output by the change in quantity of labor, which doesn't take into account the revenue generated by the additional output produced by the additional labor.

The Marginal Revenue Product of Labor Is Equal to