If the marginal revenue product of an input is greater than its price, the
A. firm should decrease its use of the input to bring the two values into equality.
B. firm should raise the price of the product.
C. firm should increase the use of the input to bring the two values into equality.
D. firm should search for another input to use in its production.
Answer: C
You might also like to view...
As a curve approaches a maximum point, the slope will
A) be positive, then negative after the maximum point. B) be negative, then positive after the maximum point. C) remain constant on either side of the maximum point. D) increase before and after the maximum point.
If two households have the same disposable income in the current year, the household with the
A) higher expected future income will consume a larger portion of its current income today. B) lower expected future income will consume more today while it has the money. C) lower expected future income will spend a larger portion of its current income on consumption today because it will increase its saving in the future. D) none of the above