If a Firm Is a Price Taker in Both the Input

question 4

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 other answers are correct.

---

Definitions:

Gross Investment

The total amount spent on new capital assets, before accounting for depreciation, indicating the level of investment in an economy's productive capacity.

Net Investment

The total a company invests in new capital assets, minus the cost of depreciation.

Bondholders

Individuals or institutions that hold the debt securities issued by governments or corporations, entitled to receive interest payments and the principal on maturity.

Common Stockholders

Individuals or entities that own shares of common stock in a company, granting them certain rights like voting on corporate matters.