The value of the marginal product is equal to
A) marginal product × marginal cost.
B) marginal product × product price.
C) marginal revenue × marginal cost.
D) marginal cost × product price.
E) marginal product ÷ product price.

Question

Quizplus · Accepted Answer

The value of the marginal product (VMP) represents the additional revenue generated by producing an additional unit of output. Therefore, the formula for VMP is marginal product (MP) multiplied by the price of the product (P), or VMP = MP × P. Option B correctly represents this formula. Option A is incorrect because it multiplies MP by the cost, not the price. Option C is incorrect because it multiplies marginal revenue instead of price. Option D is also incorrect because it multiplies marginal cost instead of price. Option E is incorrect because it divides MP by price rather than multiplying them.

The Value of the Marginal Product Is Equal to