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:

Plants

Multicellular organisms in the kingdom Plantae that typically produce their own food through photosynthesis and have cell walls made of cellulose.

Fish

Aquatic, gill-bearing organisms that lack limbs with digits, comprising a large and diverse group of vertebrates inhabiting both fresh and saltwater environments.

Birds

Warm-blooded, feathered vertebrates that lay eggs and have wings, belonging to the class Aves.

Threatened Species

A species in which the population is small enough for it to be at risk of becoming extinct throughout all or part of its range but not so small that it is in imminent danger of extinction. Compare with endangered species.