FIGURE 13- 3 The demand and supply curves shown below apply to a competitive market for a factor used in the production of widgets.

-The marginal revenue product of labour is the change in the value of the firm's output resulting from
A)hiring one more unit of labour input.
B)producing one more unit of output.
C)an increase in the marginal physical product of labour.
D)a change in the wage rate paid to labour.
E)a change in the product's price.

Question

FIGURE 13- 3 The demand and supply curves shown below apply to a competitive market for a factor used in the production of widgets.
 
-The marginal revenue product of labour is the change in the value of the firm's output resulting from
A)hiring one more unit of labour input. 
B)producing one more unit of output. 
C)an increase in the marginal physical product of labour. 
D)a change in the wage rate paid to labour. 
E)a change in the product's price.

Quizplus · Accepted Answer

The marginal revenue product of labour measures the change in total revenue resulting from hiring one more unit of labour input. It is calculated by multiplying the marginal physical product of labour (change in output resulting from hiring one more unit of labour input) by the price of the product. Therefore, the correct choice is A.

FIGURE 13- 3 the Demand and Supply Curves Shown Below