The additional revenue a firm obtains from hiring one more unit of input is called the marginal revenue product.

Question

Quizplus · Accepted Answer

This statement is true. The marginal revenue product is the change in total revenue that results from hiring one additional unit of input, such as labor. It is calculated as the product of the marginal product of the input (i.e. the additional output that results from hiring one more unit of input) and the price of the output.

The Additional Revenue a Firm Obtains from Hiring One More