In the product market, changes in technology affect the marginal ________ of a unit of output. In the labor market, changes in technology affect the marginal ________ of a unit of labor input.
A) cost; cost
B) revenue; revenue
C) revenue product; cost
D) cost; revenue product

Question

Quizplus · Accepted Answer

In the product market, technological advancements typically lead to a decrease in the marginal cost of producing a unit of output because they often make production processes more efficient. In the labor market, these advancements affect the marginal revenue product of labor, which is the additional revenue a firm earns from hiring an additional unit of labor, by potentially increasing it if the technology enhances the productivity of labor.

In the Product Market, Changes in Technology Affect the Marginal