The marginal cost of a productive resource is equal to the price of the resource if a firm is
A)a price taker in the output market.
B)a price taker in the resource market.
C)able to influence the price of the product by producing more or less of it.
D)able to influence the price of the factor by buying more or less of it.

Question

Quizplus · Accepted Answer

The marginal cost of a productive resource equals the price of the resource when a firm is a price taker in the resource market. This means the firm has no power to influence the price of the resources it buys; it takes the market price as given.

The Marginal Cost of a Productive Resource Is Equal to the Price