Which of the Following Is the Best Definition of the Marginal

question 68

Multiple Choice

Which of the following is the best definition of the marginal revenue product (MRP) of a factor of production?

• A)the average product of the factor multiplied by the price of the output
• B)the change in revenue generated by the sale of the product produced by an additional unit of input
• C)the change in revenue caused by the sale of an additional unit of output
• D)the increase in output resulting from the use of an additional unit of the factor multiplied by the cost of that factor
• E)marginal revenue multiplied by total product

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Definitions:

Present Values

The present value of a future amount of money or series of payments, based on a certain rate of return.

Working Capital

The difference between a company's current assets and current liabilities, indicating its short-term financial health and efficiency.

Sales Revenue

The income received by a company from its sales of goods or services before any expenses are deducted.

Working Capital

The measure of a company's short-term liquidity, determined by subtracting current liabilities from current assets.