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In 2009 General Motors (GM) announced that it would reduce employment by 21,000 workers. What does this decision reveal about how GM viewed its marginal revenue product (MRP) and marginal resource cost?
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In 2009 General Motors (GM) announced that it would reduce employment by 21,000 workers. What does this decision reveal about how GM viewed its marginal revenue product (MRP) and marginal resource cost?

User Shivasubramanian A
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Answer:

The marginal resource cost is greater than the marginal revenue product.

In other words, the cost of employing the workers was greater than the revenue generated by the workers' output.

Step-by-step explanation:

The marginal revenue product (MRP) is the monetary value of the additional output generated by employing the 21,000 workers.

The marginal resource cost (MRC) is the additional cost of employing the 21,000 workers.

User Chongzixin
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