Question 1 (1 point) B Which of the following is NOT true about resource markets

Question

Question 1 (1 point) B Which of the following is NOT true about resource markets? - Firms maximize profits by hiring resources until their marginal revenue product(MRP) no longer exceeds their marginal resource cost(MRC) or in other words, when MRP-MRC Marginal Revenue Product is the change in total product when an additional unit of a resource is employed. Marginal Resource Cost is the change in total cost resulting from the employment of an additional unit of a resource. The MRP-MRC proft maximization formula only applies for firms in perfectly imperative markets. Save

Explanation / Answer

The change in total product when an additional unit of a resource is employed is referred to as marginal product.

On the contrary, marginal revenue product implies the change in total revenue when nore unit of a resource is employed.

Hence, the correct answer is the option (2).

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