The Value of the Marginal Product Is

question 146

Multiple Choice

The value of the marginal product is

• A) total output divided by total inputs.
• B) the marginal product of an input times the price of the output.
• C) the change in total output divided by the change of an input.
• D) total revenue minus total cost.
• E) marginal revenue minus marginal cost.

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Definitions:

MC = MR

Stands for the economic principle where Marginal Cost (MC) equals Marginal Revenue (MR), a condition for profit maximization in firms, indicating the optimal level of production.

Profit-maximizing Level

The point at which a firm achieves the highest possible profit, balancing the cost of production against revenue from sales.

Perfectly Competitive

A perfectly competitive market is an economic concept where numerous small firms compete against each other with homogenous products, and no single firm can influence the market price.

MR = MC

A condition in economics where the marginal revenue (MR) of producing one more unit of a good matches the marginal cost (MC) of producing that unit, used in determining the optimum production quantity.