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JAMB Economics 1987 Question 5

Question 5

Theory of Production

The additional revenue obtained by using one more unit of a factor is called its

  1. A.marginal product
  2. B.additional product
  3. C.marginal revenue product
  4. D.average product.
Show the answer and explanation

Answer: C (marginal revenue product)

Explanation

Marginal revenue product is the extra revenue a firm earns from employing one more unit of a factor (MP × MR).