Marginal Revenue Product Measures the

question 53

Multiple Choice

Marginal revenue product measures the

• A) amount by which the addition of one more worker increases a firm's total revenue.
• B) decline in product price that a firm must accept to sell the extra output of one more worker.
• C) increase in total resource cost resulting from the hire of one extra unit of a resource.
• D) increase in total revenue resulting from the production of one more unit of a product.

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Definitions:

Finance Lease

A type of lease in which the lessee effectively takes on all the risks and rewards of ownership, though legally the asset remains owned by the lessor.

Lessors

Entities that lease an asset to a lessee, typically retaining ownership of the asset for the duration of the lease agreement.

Market Rent

The average rent that similar properties in the same area are fetching on the open market; used as a benchmark in lease agreements.

Fair Value

The proceeds from selling an asset or the outlay to relocate a liability in a planned interaction among market stakeholders on the benchmark date.