The marginal revenue product of a resource is equal to the value of marginal product when the product produced by the resource is sold in
A) a competitive price-taker market.
B) a competitive price-searcher market.
C) an oligopolistic market.
D) a monopolistic industry.

Question

Quizplus · Accepted Answer

In a competitive price-taker market, firms are price takers and sell their products at the market price. Therefore, the marginal revenue product (MRP) of a resource, which is the additional revenue generated from using one more unit of the resource, is equal to the value of the marginal product (VMP), which is the additional output produced by one more unit of the resource times the market price.

The Marginal Revenue Product of a Resource Is Equal to the Value