The marginal revenue product of labor refers to the
A) additional output produced by adding one more unit of labor.
B) marginal product of an additional unit of labor.
C) additional revenue resulting from using one more unit of labor.
D) number of units of output produced by a given number of units of labor.

Question

Quizplus · Accepted Answer

The marginal revenue product of labor measures the additional revenue a firm generates by using one more unit of labor. It is calculated as the product of the marginal physical product of labor and the marginal revenue generated by the additional output. In other words, it looks at how much revenue each additional unit of labor contributes to the firm's total revenue.

The Marginal Revenue Product of Labor Refers to the