The figure given below shows the marginal revenue product (MRP) of accountants in a firm.Figure 14.2
MRP = MP X MR

-If the resource market is perfectly competitive:
A)the market demand for the resource is perfectly elastic.
B)the market demand for the resource is perfectly inelastic.
C)the suppliers can affect the input price by increasing or reducing their supply.
D)the input price to each firm is constant.
E)the supply of the resource is perfectly inelastic.

Question

The figure given below shows the marginal revenue product (MRP) of accountants in a firm.Figure 14.2
MRP = MP X MR
 
-If the resource market is perfectly competitive:
A)the market demand for the resource is perfectly elastic. 
B)the market demand for the resource is perfectly inelastic. 
C)the suppliers can affect the input price by increasing or reducing their supply. 
D)the input price to each firm is constant. 
E)the supply of the resource is perfectly inelastic.

Quizplus · Accepted Answer

If the resource market is perfectly competitive, each firm is a price-taker and cannot affect the input price. Therefore, the input price to each firm is constant.

The Figure Given Below Shows the Marginal Revenue Product (MRP)