is fixed by the government.
is less than the value of their marginal product.
is more than the value of their marginal product.
is double the value of their marginal product.
is equal to the value of their marginal product
2007-02-18 11:36:07 · 2 answers · asked by stevie 1 in Social Science ➔ Economics
It is equal to the value of their marginal product. In a perfectly competitve market, the firm will maximize its profits by setting marginal revenue equal to marginal cost. Marginal revenue is the marginal product. Marginal cost will be the cost of each additional unit of resources consumed. Thus, when the cost of each additional nit of resource is equal to the marginal product, the firm will stop purchasing.
2007-02-18 15:50:15 · answer #1 · answered by theeconomicsguy 5 · 1⤊ 0⤋
The question of source allocation is that of allocating inputs to create output, and outputs to furnish application to customers. the fee mechanism assists in 2 tiers: a million) indicators relative excesses (the two of call for or grant) in the output marketplace and enter marketplace, which aids the production determination. 2) purposes to correspond to application in the output marketplace. an entire evidence might take a great way too long. See Arrow and DeBrue's 1961 paper outlining the evidence.
2016-10-02 08:52:36 · answer #2 · answered by ? 3 · 0⤊ 0⤋