The marginal resource cost of an input is identical to the firm's demand curve for that input.

Question

Quizplus · Accepted Answer

The marginal resource cost (MRC) of an input refers to the additional cost of utilizing one more unit of that input. It is not identical to the firm's demand curve for that input. The firm's demand curve for an input is derived from the marginal product of the input and the marginal revenue product (MRP), which reflects the additional revenue generated from using one more unit of the input. The demand curve for an input is based on the MRP, not the MRC.

The Marginal Resource Cost of an Input Is Identical to the Firm's