When labour is hired in a competitive market,the value of the marginal product of labour is computed by:
A) multiplying the price of the output by the marginal product of labour.
B) multiplying the price of the output by the wage paid to labour.
C) multiplying the wage paid to labour by the marginal product of labour.
D) dividing the marginal product of labour by the price of the output.

Question

Quizplus · Accepted Answer

The value of the marginal product of labour is calculated by multiplying the marginal product of labour by the price of the output, reflecting the additional revenue generated by employing one more unit of labour.

When Labour Is Hired in a Competitive Market,the Value of the Marginal