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CAIE A-Level Economics 8.3.4 Marginal Revenue Product Theory

Practise calculating marginal revenue product, deriving a firm's labour-demand curve and choosing employment where MRP equals marginal labour cost, then evaluating wage…

Syllabus
2026–2028
Course
Economics 9708
Level
A2

Exam points

  • calculate MRP as marginal physical product multiplied by marginal revenue
  • hire labour up to the unit where MRP equals marginal cost of labour for profit maximisation
  • shift MRP for productivity, output-price or product-demand changes and evaluate wage gaps

8.3.4—MRP theory question 1

[Maximum number: 1]

How is marginal revenue product calculated?

A

marginal physical product × marginal revenue

B

marginal physical product ÷ price

C

total physical product × marginal cost

D

total physical product ÷ marginal cost

All question bank results loaded