CFA Practice Question

There are 539 practice questions for this study session.

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 = MR*MP
MRP = 8*3 --> 24
boddunah perfect competitive market
MR = P .
MRP = MR*MP
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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