For a firm selling its product in a purely competitive market, the marginal revenue product of labor can be found by
A)adding marginal product to total product as one more unit of labor is employed.
B)adding marginal revenue to total product as one more unit of labor is employed.
C)multiplying marginal product by product price.
D)dividing marginal product by product price.

Question

Quizplus · Accepted Answer

Marginal revenue product of labor is calculated by multiplying the marginal product of labor (the additional output generated by employing one more unit of labor) by the price of the product in a purely competitive market. This is because, in a purely competitive market, the firm is a price taker, meaning the price of the product is determined by the market and does not change with the quantity of output the firm produces.

For a Firm Selling Its Product in a Purely Competitive