The Marginal Revenue Product Gives

question 31

Multiple Choice

The marginal revenue product gives

• A) the change in total product for an additional unit of a variable input.
• B) the amount that other inputs must increase by when labor increase by one unit.
• C) the additions to total cost when an additional unit of a variable input is hired.
• D) the additional revenue obtained when an additional unit of a variable input is hired.

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Definitions:

Market Price

The cost at which a product or service is made available in the market, dictated by the forces of supply and demand.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, indicating the profit beyond the normal return on investment.

Marginal Decision Rule

A principle stating that an action should be taken if, and only if, the marginal benefits are greater than or equal to the marginal costs.

MR

Short for Marginal Revenue, it refers to the extra revenue that an organization receives from selling one more unit of a good or service.