If the MRP of land is greater than its price, a firm should
A) use more land.
B) use less land.
C) try to increase the productivity of land.
D) decrease the price it is willing to pay for land.

Question

Quizplus · Accepted Answer

When the Marginal Revenue Product (MRP) of land is greater than its price, it means the firm can generate more revenue from the last unit of land used than it costs to use that unit. Therefore, it is profitable for the firm to use more land.

If the MRP of Land Is Greater Than Its Price