Define the concept of marginal revenue product

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Define the concept of marginal revenue product (MRP), or value of the marginal product as defined on p. 377 of the textbook; then relate that to the marginal cost of the labor input factor. Explain why a competitive, profit-maximizing firm hires workers up to the point at which MRP and the marginal cost (i.e., wage rate) are equal.

page 377 defines value of the marginal product as the marginal product of an input times the price of the output

Reference no: EM131161968

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