The figure represents the value of marginal product for a firm that sells its product in a competitive market.
Figure 18-1

-Refer to Figure 18-1.The value of the marginal product curve shown in this figure is the same as which of the following?

Question

The figure represents the value of marginal product for a firm that sells its product in a competitive market.
Figure 18-1
 
-Refer to Figure 18-1.The value of the marginal product curve shown in this figure is the same as which of the following?

Quizplus · Accepted Answer

The value of marginal product (VMP) represents the additional revenue earned by a firm from hiring one more unit of labor. The VMP is equal to the marginal revenue product (MRP), which is the change in total revenue due to a change in the quantity of labor employed. The concept of MRP is similar to the concept of labor demand as it reflects the willingness of the firm to pay for an additional unit of labor. Therefore, the value of marginal product curve shown in the figure is the same as the labor demand curve.

The Figure Represents the Value of Marginal Product for a Firm