If the marginal revenue product of land is greater than its price, a firm should
A) use more land.
B) use less land.
C) try to decrease the productivity of land.
D) decrease the price it is willing to pay for land.

Question

Quizplus · Accepted Answer

When the marginal revenue product (MRP) of land is greater than its price, it means that each additional unit of land used generates more revenue than it costs. Therefore, it is profitable for the firm to use more land until the MRP equals the price of land.

If the Marginal Revenue Product of Land Is Greater Than