Holding the price of a firm's output constant, if the marginal product of labour increases
A)the marginal revenue product of labour decreases.
B)the marginal revenue product of labour also increases.
C)the marginal products of other inputs also increase.
D)the marginal revenue product of labour may increase or decrease.

Question

Quizplus · Accepted Answer

If the marginal product of labour increases while holding the price of output constant, it means that the firm can produce more output with the same input of labour. This implies that the marginal revenue product of labour (MRPL) also increases, as it measures the additional revenue generated by each additional unit of labour. The other options (A, C, and D) do not necessarily follow from the given conditions.

Holding the Price of a Firm's Output Constant, If the Marginal