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I thought it was d. but got that wrong. Explain answer Marginal revenue product describes the:...

I thought it was d. but got that wrong. Explain answer

Marginal revenue product describes the:

a. output produced by the last unit of input employed.

b. revenue received for the last unit of output produced.

c. price a consumer paid for the last unit of output produced.

d. revenue received for the output produced by the last unit of labor employed.

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Answer #1

It must be (d). The right answer is (d) and no doubt about it. Why I am explaining. Marginal revenue product is the extra revenue generated from using one more unit of input. It is explained by the change in total revenue divided by the change in the number of inputs. It is the marginal product multiplied by marginal revenue. So it will be marginal product of last unit of labour multiplied by marginal revenue. MRP = ∆TR/ ∆ X. Where X is the input ( labour).

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