Economics
5th Edition
ISBN: 9781319066604
Author: Paul Krugman, Robin Wells
Publisher: Worth Publishers
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Question
Chapter 19, Problem 7P
To determine
Concept Introduction
Marginal Product (MP): This refers to the production of an extra unit of output when an extra unit of input factor is employed.
The formula to calculate the marginal product is:
Value of Marginal Product (VMP): This refers to the value of additional units of output produced when an additional unit of input factor is employed.
The formula to calculate the value of marginal product is:
Here,
- MP is the marginal product.
- P is the price.
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