If a Firm Is a Price Taker in Both the Input

question 39

Multiple Choice

If a firm is a price taker in both the input and output markets,its marginal revenue product of labor is given by

• A) the price of its output times labor's marginal physical productivity.
• B) the marginal value product of labor.
• C) the marginal revenue product of capital times the ratio of the wage rate to the rental rate on capital.
• D) all of the above.

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Definitions:

Third-Party Beneficiary

A recipient of contractual benefits who is not one of the contracting parties; created when two parties enter into a contract with the intended purpose of benefiting a third party.

Creditor Beneficiary

A third party that benefits from a contract made between two other parties, especially in terms of having the right to claim performance or compensation.

Donee Beneficiary

An external party that gains advantages from an agreement established between two different parties.

Delegation

The process of assigning authority and responsibilities to others to carry out specific activities or tasks.