An Isorevenue Line

question 19

Multiple Choice

An isorevenue line:

• A) shows combinations of two outputs that produce the same level of revenue
• B) the slope is equal to the negative price ratio of the two outputs
• C) the slope measures the rate of economic substitution between the two outputs
• D) all of the other three answers

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Definitions:

Imperfect Competitor

An entity in a market that does not hold enough power to dictate the conditions of the market but can influence the price and output of its goods to some extent.

MRP

Marginal Revenue Product, the additional revenue generated from employing one more unit of a factor of production.

Unit of Input

The smallest measure of an input (like labour, materials) used in the production of goods or services.

Complementary Resources

Assets or inputs that are used together with another resource to produce a good or service, enhancing each other's value in the process.