According to the Principle of Marginal Productivity, If

question 81

Multiple Choice

According to the principle of marginal productivity, if

• A) the product price is less than marginal revenue product (MRP), the firm is using too little of the input.
• B) the price of an input rises, the quantity demanded of the input will increase.
• C) MRP is greater than product price, the firm should reduce the use of the input.
• D) price of the input equals MRP, the firm is maximizing profit.

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Definitions:

Balance Sheet

A balance sheet that illustrates a corporation's resources, outstanding debts, and the net worth held by shareholders at a pinpointed moment.

Statement of Retained Earnings

A financial statement that shows changes in a company's retained earnings over a specific period.

Income Statement

A financial statement that shows a company's revenue and expenses over a specific period, resulting in net profit or loss.

Financial Errors

Mistakes in the accounting records that can distort the financial statements and mislead users.