Marginal revenue product measures the
A)amount by which the addition of one more worker increases a firm's total revenue.
B)decline in product price that a firm must accept to sell the extra output of one more worker.
C)increase in total resource cost resulting from the hire of one extra unit of a resource.
D)increase in total revenue resulting from the production of one more unit of a product.

Question

Quizplus · Accepted Answer

Marginal revenue product specifically refers to the increase in total revenue a firm experiences as a result of adding one more unit of a resource, such as a worker. This concept is used to determine the additional revenue generated from hiring an additional worker, assuming all other factors remain constant.

Marginal Revenue Product Measures the