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If a and B Are Substitutes and the Cost of a Factor

question 140

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If A and B are substitutes and the cost of a factor of production used in the production of A increases, then the price of


Definitions:

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource or factor of production.

Wage Rate

The fixed amount of compensation paid to an employee for performed labor, typically expressed per hour or unit of work.

Marginal Revenue Product

The additional revenue generated by employing one more unit of a resource or factor of production.

Marginal Cost

is the change in total production cost that arises when the quantity produced is incremented by one unit, reflecting the cost of producing one additional unit of a good or service.

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