The diagram below shows the MRP curve for a firm producing copper plumbing pipe.The factor of production being considered here is hours of labour.
FIGURE 13- 2
-Refer to Figure 13- 2.Assume that the firm is a perfect competitor and the price of the firm's output is fixed.We know that the firm's MRP curve is
A)the same shape as the firm's marginal revenue curve.
B)flatter than the firm's marginal product curve for labour.
C)horizontal,if the firm is perfectly competitive.
D)steeper than the firm's marginal product curve for labour.
E)the same shape as the firm's marginal product curve for labour.

Question

The diagram below shows the MRP curve for a firm producing copper plumbing pipe.The factor of production being considered here is hours of labour.
  FIGURE 13- 2
-Refer to Figure 13- 2.Assume that the firm is a perfect competitor and the price of the firm's output is fixed.We know that the firm's MRP curve is
A)the same shape as the firm's marginal revenue curve. 
B)flatter than the firm's marginal product curve for labour. 
C)horizontal,if the firm is perfectly competitive. 
D)steeper than the firm's marginal product curve for labour. 
E)the same shape as the firm's marginal product curve for labour.

Quizplus · Accepted Answer

The MRP curve represents the firm's marginal revenue product, which is the additional revenue generated by hiring one additional unit of labor. Therefore, it is the same shape as the firm's marginal product curve for labor, which represents the additional output generated by hiring one additional unit of labor. Thus, E is the correct choice.

The Diagram Below Shows the MRP Curve for a Firm