Unit 4: Labor and Efficiency: Resource Markets, Inequality, and Immigration

Lesson 12a: Demand For Resources

Key Formulas

 

marginal product: MP = TP / Qres

marginal revenue product: MRP = TR / Qres

marginal resource cost: MRC = TC / Qres

profit maximizing rule for hiring resources: MRP = MRC

value of the marginal product: VMP = P X MP

allocative efficiency quantity of resources: VMP = W

 

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Lesson 12a