The Figure Given Below Shows the Marginal Revenue Product (MRP)

question 31

Multiple Choice

The figure given below shows the marginal revenue product (MRP) of accountants in a firm.Figure 14.2
MRP = MP X MR

-A firm under any market structure maximizes profits at a point where:

• A)marginal revenue product is greater than marginal factor cost.
• B)marginal revenue product is equal to marginal factor cost.
• C)marginal revenue product is equal to zero.
• D)marginal factor cost is equal to zero.
• E)marginal revenue product is less than marginal factor cost.

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Definitions:

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a specific price, over a specified period of time.

Equilibrium

A state in which market supply and demand balance each other, and as a result, prices become stable.

Quantity Supplied

The quantity of a product or service that suppliers are ready and capable of offering for sale at a certain price during a defined timeframe.

Equilibrium Price

The equilibrium price is the price at which the quantity of goods suppliers are willing to supply matches the quantity of goods consumers are willing to buy, leading to market equilibrium.