O profitability.the level of production.unit costs.dollar revenue.A profit-maximizing firm operating in a perfectly competitive market will add new units of a factor of production untilmarginal revenue product equals marginal product.marginal revenue product equals marginal revenue.marginal revenue product equals factor price.marginal productrequals factor price.824 P12/15/246°Fa近 Question 23 of 30The marginal product of a factor shows how much an additional unit of a factor adds tounit costs.dollar revenue.the level of production.O profitability.The marginal revenue product of a factor shows how much an additional unit of a factor adds toO profitability.the level of production.unit costs.dollar revenue.46°Fa

(1) Marginal revenue product of a factor is the addition to the total revenue due to hiring of an additional unit of that factor. A perfectly competitive firm will keep hiring additional unit of a factor until marginal revenue product is equals to factor cost. Answer: Option (C), i.e., marginal revenue product equals factor price. (2) Marginal product of a factor is the change in total output due to change in factor of production by an unit. The marginal product of factor shows how much an additional unit of a factor adds to the level of production. Answer: Option (C), i.e., the level of production (3) Marginal revenue product of a factor is the addition to the total revenue due to hiring of an additional unit of that factor The marginal revenue product of a factor shows how much an additional unit of a factor adds to dollar revenue. Answer: Option (D), i.e., dollar revenue

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Economics

A profit-maximizing firm operating in a perfectly competitive market will add new units of a factor of production until marginal revenue product equals marginal product. marginal revenue product equals marginal revenue. marginal revenue product equals factor price. marginal productequals factor price.

A profit-maximizing firm operating in a perfectly competitive market will add new units of a factor of production until marginal revenue product equals marginal product. marginal revenue product equals marginal revenue. marginal revenue product equals factor price. marginal productequals factor price.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 14RQ: How do we calculate marginal product?

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