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

Question

Quizplus · Accepted Answer

The marginal revenue product of labour measures the increase in total revenue as a result of hiring an additional unit of labour. Therefore, the correct choice is C, which represents hiring one more unit of labour input. The other choices, A, B, D, and E, do not fully capture the definition of marginal revenue product of labour.

The Marginal Revenue Product of Labour Is the Change in the Value