CFA Practice Question

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CFA Practice Question

The change in total revenue that results from employing one more unit of labor is called the ______.

A. marginal revenue
B. marginal revenue product
C. marginal product
Correct Answer: B

User Contributed Comments 5

User Comment
Khadria MRP = MR * MP where MR is the change in revenue for one additional unit produced.
boddunah MR is the change in TR for one additional unit sold.
1 unit sold for $10 = $10(TR)
2 units sold for $18 = $18(TR)
MR = 18-10/1 = 8.
MP is the change in TP for one additional unit labor employed.
1 unit of labor produces 4 goods(TP)
2 units of labor produce 7 goods(TP)
MP = change in TP/change in labor.
MP = 7-4/1 = 3
MRP = 8*3 --> 24
boddunah perfect competitive market
MR = P .
MRP = P*MP----. price* marginal product of labor.
PJMOHAN I found the post by boddunah more informative and concept clearing than the entire write up!! Thanks a lot!!!!
fangluez Definition:

MR = Change of total revenue from additional unit of production and sale of additional output.

MP = Change of total production from hiring additional labor.
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