g The effect on revenue due to a marginal increase in the input is called the marginal revenue product. Match the statements bel

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g The effect on revenue due to a marginal increase in the input is called the marginal revenue product. Match the statements bel

ow with the appropriate type of market structure a firm operates in. The marginal revenue product of the input x is lower than the value of the marginal product of that input (price times marginal product). This statement is true for a

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1 answer:

morpeh [17] · Answer 1 · 2022-07-25T09:44:43+03:00

Answer:

Statement true for Imperfect Competition Markets

Explanation:

Marginal Revenue Product is additional revenue due to hiring of additional input, it is product of marginal product & marginal revenue = MP x MR

Value Marginal Product is money value of additional production with additional input, product of marginal product (MP) & price (AR), = MP x AR

Input demand curves are derived demand curves, derived from demand of final goods. In perfect competition, demand is perfectly inelastic & horizontal, AR = MR, so MRP = VMP in this case. In imperfect competition market (oligopoly, monopoly etc) - MR < AR, so MRP < VMP in this case.