The value of the marginal product of labor, VMPL, for the perfectly competitive firm equals
A)the total revenue the firm will get by selling the equilibrium amount of output.
B)the extra revenue the firm gets by selling the output of one additional unit of labor.
C)the revenue from the sale of one more unit of output.
D)the price of the product being produced by labor.

Question

Quizplus · Accepted Answer

The value of the marginal product of labor (VMPL) is the additional revenue that a firm earns by hiring one more unit of labor. This means that it is the extra revenue from selling the output of one additional unit of labor. Therefore, choice B is the correct answer. The other choices are not correct because they do not take into account the marginal contribution of labor to the firm's revenue.

The Value of the Marginal Product of Labor, VMPL, for the Perfectly