For a perfectly competitive firm,the marginal revenue product of an input will be:
A)represented by a horizontal line at the input price.
B)represented by an upward-sloping curve.
C)the product of the marginal product and marginal cost.
D)the same as the marginal value product.

Question

Quizplus · Accepted Answer

The marginal revenue product of an input is the additional revenue a firm earns by employing one more unit of that input, which is calculated as the product of the marginal product of the input and the price of the output (marginal value product), not the input price or marginal cost. This concept assumes perfect competition, where firms are price takers, making the marginal revenue product equal to the marginal value product.

For a Perfectly Competitive Firm,the Marginal Revenue Product of an Input