Question

What is the Marginal Revenue Product?

1) The change in revenue when one more worker is employed
2) The change in revenue when one more unit of input is employed
3) The change in revenue when one more unit of output is produced
4) The change in revenue when one more unit of capital is employed

Answer 1

The Marginal Revenue Product is the change in revenue when one more unit of input is employed. It measures the additional revenue generated by employing one more unit of an input, such as labor, capital, or some other factor of production.

Step-by-step explanation:

Marginal Revenue Product is the change in revenue when one more unit of input is employed.

It measures the additional revenue generated by employing one more unit of an input, such as labor, capital, or some other factor of production.

For example, if a company hires an additional worker and their productivity leads to an increase in output and revenue, the change in revenue resulting from that additional worker is the Marginal Revenue Product.