The table below shows the total output produced by different units of a resource. Assume that the resource and output markets are both perfectly competitive. The equilibrium price of the resource is $15.00, and the equilibrium price of the product is $0.50.Table 14.2
Marginal revenue product (MRP) of a resource is the product of the marginal product of the resource and the marginal revenue.
-Refer to Table 14.2. What is the marginal factor cost for the third unit of the resource?
A)$13.00
B)$15.00
C)$17.50
D)$195.00
E)$19.50

Question

The table below shows the total output produced by different units of a resource. Assume that the resource and output markets are both perfectly competitive. The equilibrium price of the resource is $15.00, and the equilibrium price of the product is $0.50.Table 14.2
Marginal revenue product (MRP) of a resource is the product of the marginal product of the resource and the marginal revenue. 
-Refer to Table 14.2. What is the marginal factor cost for the third unit of the resource?
A)$13.00 
B)$15.00 
C)$17.50 
D)$195.00 
E)$19.50

Quizplus · Accepted Answer

Marginal factor cost (MFC) is equal to the price of the resource in a perfectly competitive market, which is $15.00 for all units. Therefore, the MFC for the third unit of the resource is also $15.00.

The Table Below Shows the Total Output Produced by Different