Asked by
Camery Taylor
on Nov 26, 2024
Verified
If the price of a resource is greater than its marginal revenue product, the firm should
A) charge a higher price for its product.
B) make no change in the units of the resource used.
C) increase the units of the resource used in order to increase profits.
D) decrease the units of the resource used in order to increase profits.
Marginal Revenue Product
The additional revenue generated from employing one additional unit of a resource, such as labor or capital.
- Recognize the effects of input prices on the production costs and decision-making of firms.
- Explain the concept of marginal revenue product (MRP) and its impact on the decision-making process related to the utilization of resources.
Verified Answer
FA
Learning Objectives
- Recognize the effects of input prices on the production costs and decision-making of firms.
- Explain the concept of marginal revenue product (MRP) and its impact on the decision-making process related to the utilization of resources.