A profit-maximizing firm should hire an input as long as the
A)firm can increase its total revenue.
B)price of the input doesn't exceed the price of the other inputs used in the firm's production.
C)marginal revenue product of the input is at least as much as the cost of hiring the input.
D)marginal revenue product of the input is greater than the marginal revenue product of other inputs the firm is using.

Question

Quizplus · Accepted Answer

The marginal revenue product (MRP) of an input is the additional revenue a firm earns by employing one more unit of that input. A profit-maximizing firm should continue to hire an input as long as the MRP of the input is at least as much as the cost of hiring the input. This ensures that the firm is getting at least as much value from the input as it costs to employ it, aligning with profit maximization principles.

A Profit-Maximizing Firm Should Hire an Input as Long as the