The figure given below represents equilibrium in the labor market with the demand and supply curves of labor.Figure 14.6
In the figure,
D = MRP implies demand for labor = Marginal Revenue Product
MFC represents Marginal Factor Cost curve
S represents the supply curve of labor

-The value of the marginal product of a resource is equal to:
A)the marginal revenue of the firm, if the product market is perfectly competitive.
B)the market price of the product divided by the price of the resource.
C)the market price of the product divided by the marginal product of the resource.
D)the marginal revenue product of the resource, if the product market is perfectly competitive.
E)the marginal product of the resource divided by the price of the resource.

Question

The figure given below represents equilibrium in the labor market with the demand and supply curves of labor.Figure 14.6
In the figure,
D = MRP implies demand for labor = Marginal Revenue Product
MFC represents Marginal Factor Cost curve
S represents the supply curve of labor
 
-The value of the marginal product of a resource is equal to:
A)the marginal revenue of the firm, if the product market is perfectly competitive. 
B)the market price of the product divided by the price of the resource. 
C)the market price of the product divided by the marginal product of the resource. 
D)the marginal revenue product of the resource, if the product market is perfectly competitive. 
E)the marginal product of the resource divided by the price of the resource.

Quizplus · Accepted Answer

The value of the marginal product of a resource is equal to the marginal revenue product of the resource, if the product market is perfectly competitive. This means that the additional revenue generated by one additional unit of the resource is the same as the marginal product of that resource.

The Figure Given Below Represents Equilibrium in the Labor Market