When the Marginal Revenue Product of an Input Is Less

question 110

Multiple Choice

When the marginal revenue product of an input is less than its price, the

• A) producer should expand the use of that input.
• B) price of the input will automatically rise in a free market.
• C) producer should reduce the use of that input.
• D) marginal physical product of that input must be below its average physical product.

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Definitions:

Income Statement

A financial statement that shows a company's revenues, expenses, and profits or losses over a particular period of time.

Linkage

The connection or relationship between two or more factors, objects, or systems.

Period Costs

Expenses that are not directly tied to the production of goods and are expensed in the period they are incurred.

Individual Sales

Individual Sales refer to transactions and revenue generated from selling products or services on a per-unit or single-transaction basis.