1 Explain the difference between the marginal product of a f

1. Explain the difference between the marginal product of a factor and the marginal revenue product of a factor. What factors would change a fac- tor\'s marginal product? Its marginal revenue product?

Solution

Answer 1 :

marginal product : the marginal product of a factor of production is generally defined as the change in output associated with a change in that factor, holding other inputs into production constant.

marginal revenue product of a factor :The change in revenue that results from the addition of one extra unit when all other factors are kept equal. The marginal revenue product is used in marginal analysis to examine the effect of variable inputs, such as labor, and follows the law of diminishing marginal returns.

The marginal revenue product is different than the marginal product in that it is not a measure of quantity but a measure of revenue.

factors that change the marginal revenue product: change in output along with the corresponding change in input, times the price of the output.

factors that change the marginal product : change in the factor of production which causes the change in the output, keeping all the other factors of production constant.