The marginal revenue product of labor is
A) the additional revenue a firm earns by employing one additional unit of labor.
B) the additional profit a firm earns by employing one additional unit of labor.
C) the marginal product of capital times the price of labor.
D) the additional revenue the firm makes by selling one unit of labor.

Question

Quizplus · Accepted Answer

The marginal revenue product of labor is defined as the additional revenue a firm earns by employing one additional unit of labor, which aligns with choice A. This concept is crucial in understanding how firms decide on the amount of labor to employ, as it measures the contribution of an additional worker to the firm's total revenue.

The Marginal Revenue Product of Labor Is