The marginal revenue product of an economic resource for a firm operating in purely competitive product and resource markets
A)is the marginal product of the resource divided by the price of the final product.
B)is the increase in total revenue resulting from the addition of one more unit of the resource.
C)is equal to the average revenue product at the lowest point of the average revenue product curve.
D)decreases as the quantity of output decreases.

Question

Quizplus · Accepted Answer

The marginal revenue product (MRP) of a resource is defined as the additional revenue a firm earns by employing one more unit of that resource, holding all other factors constant. This concept is crucial in determining how many units of a resource a firm should employ, based on the principle of equating MRP with the resource's cost.

The Marginal Revenue Product of an Economic Resource for a Firm