If the MRP of labor were $50 and the wage rate were $100,

Name: If the MRP of labor were $50 and the wage rate were $100,
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When the marginal revenue product (MRP) of labor is less than the wage rate, it indicates that the cost of hiring an additional unit of labor (in this case, $100) is more than the additional revenue that the labor would bring in ($50). This suggests that too much labor is being used, as each additional unit of labor is not adding enough value to cover its cost.

If the MRP of Labor Were $50 and the Wage