The following table 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?

Question

The following table 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?

Quizplus · Accepted Answer

To find the marginal-factor cost for the third unit of the resource, we look at the additional cost of adding one more unit of the resource.
From the table, we see that the total cost of using two units is $30.00, and the total cost of using three units is $45.00. Therefore, the additional cost of using the third unit is $15.00.
Since the resource market is perfectly competitive, the marginal-factor cost is equal to the equilibrium price, which is $15.00.

Therefore, the best choice is B.

The Following Table Shows the Total Output Produced by Different