Which of the following statements is true?
A)VMPL = MP × P.
B)VMPL = a one-unit change in a factor divided by the change in total revenue.
C)MC = change in total revenue divided by the one-unit change in a factor.
D)VMPL = change in the quantity of a factor times the price of the factor.

Question

Quizplus · Accepted Answer

VMPL (value of marginal product of labor) is calculated by multiplying the marginal product (MP) of labor with the price (P) of output. Therefore, VMPL= MP x P. Option B is incorrect as it refers to the elasticity of a factor of production, while option C relates to the marginal cost of production. Option D is also incorrect as it is the formula for calculating the total cost of a factor of production.

Which of the Following Statements Is True