The figure given below represents the marginal revenue product (MRP) and the marginal factor cost (MFC) of a resource in the resource market. Figure 14.3 Consider the resource market shown in Figure 14.3.Given that the resource market is perfectly competitive,how many units of the resource will be purchased when the market is in equilibrium?
A)Less than 10 units
B)10 units
C)Between 10 and 15 units
D)15 units
E)More than 15 units

Question

The figure given below represents the marginal revenue product (MRP) and the marginal factor cost (MFC) of a resource in the resource market. Figure 14.3  Consider the resource market shown in Figure 14.3.Given that the resource market is perfectly competitive,how many units of the resource will be purchased when the market is in equilibrium?
A)Less than 10 units 
B)10 units 
C)Between 10 and 15 units 
D)15 units 
E)More than 15 units

Quizplus · Accepted Answer

The market will be in equilibrium when MRP=MFC. From the graph, we can see that MRP=MFC at 15 units. Therefore, 15 units of the resource will be purchased in equilibrium.

The Figure Given Below Represents the Marginal Revenue Product (MRP)