For a firm selling its product in a purely competitive market, the marginal revenue product of labor can be found by
A) adding marginal product to total product as one more unit of labor is employed.
B) adding marginal revenue to total product as one more unit of labor is employed.
C) multiplying marginal product by product price.
D) dividing marginal product by product price.

Question

Quizplus · Accepted Answer

The marginal revenue product of labor can be found by multiplying marginal product (the additional output produced by adding one more unit of labor) by the product price (the market-determined price for the output). This calculation represents the change in revenue resulting from the addition of another unit of labor, which the firm can weigh against the cost of hiring that additional worker.

For a Firm Selling Its Product in a Purely Competitive