MRP for a perfectly competitive firm is equal to:

Question

Quizplus · Accepted Answer

MRP (Marginal Revenue Product) for a perfectly competitive firm is equal to the marginal product of labor (MPP) multiplied by the price of the product. This is because in a perfectly competitive market, the firm is a price taker and cannot influence the price of the product it sells. Therefore, the MRP of an additional unit of labor is the additional revenue the firm earns from selling the output produced by that unit of labor, which is equal to the price of the product multiplied by the MPP of that unit of labor.

MRP for a Perfectly Competitive Firm Is Equal To