Question

the marginal revenue product curve: a. is below average product (AP) when the average is falling...

the marginal revenue product curve:

a. is below average product (AP) when the average is falling

b. is equal to the value of marginal product (MP) for a competitive firm

c. is inversely related to marginal cost (MC)

d. all choices listed above

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Answer #1
  • The answer is d.
  • All choices listed above are true.
  • The marginal revenue product curve is below average product when the average is falling. When the marginal product curve moves below the average product curve, then a declining is observed.
  • The marginal revenue product curve is equal to the value of marginal product for a competitive firm. Marginal physical product and marginal revenue products are observed to be equal under the condition of perfect competition.
  • The marginal revenue product is inversely related to marginal cost. When one decrease, the other will increase and when one increase, the other will decrease.
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