A Firm Will Hire Additional Units of a Resource as Long

question 71

Multiple Choice

A firm will hire additional units of a resource as long as each unit's _____

• A)marginal revenue product is greater than zero.
• B)marginal revenue product equals the product price.
• C)marginal revenue product is greater than or equal to its marginal resource cost.
• D)marginal revenue product is less than its marginal resource cost.
• E)total revenue product is greater than its marginal resource cost.

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Definitions:

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the number of units produced, representing the per-unit cost of production.

Marginal Cost

The increase in cost resulting from the production of one additional unit of a good.

Total Cost Curve

A graphical representation showing the total cost of producing varying quantities of output, typically sloping upwards as output increases.

Average Total Cost

The total cost of production divided by the number of units produced, representing the cost per unit.