Marginal revenue product (MRP) is the Additional output by employing an addition

Question

Marginal revenue product (MRP) is the Additional output by employing an additional factor unit Additional profit generated by employing and additional factor unit Additional revenue generated by employing and additional factor unit Total revenue from the sale of a product divided by the total output of the product Which of the following will cause a firm's factor demand curve to shift to the left? A decrease in factor costs An increase in factor costs A decrease in marginal physical product An increase in marginal physical product Elasticity of demand for labor measures the percentage change in quantity demanded for labor that is brought about by a percentage change in the Demand for the product produced by labor Price of the product Quantity supplied of labor Wage rate Price of substitute factors

Explanation / Answer

Answer12: c) Additional revenue generated by employing one additional factor unit

Explanation: Marginal physical product = Additional output generated by employing one additional factor unit and itis denoted by MPP

Marginal Revenue Product (MRP) = MPP*MR

Answer13: d) A decrease in Marginal Physical Prodct

Explanation: Demand curve of labour = MRP curve

MR remaining unchanged, MRP will fall if MPP falls and vice versa.

When MRP falls, MRP curve will shift to the left, i.e. demand curve of labour shifts ot the left.

Answer14: d) Wage rate

Explanation: Elasticity of labour demand measures the responsiveness of demand for labour when there is a change in the ruling market wage rate.

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