Value marginal product (VMP) is: the price of the product multiplied by the addi

Question

Value marginal product (VMP) is: the price of the product multiplied by the additional output resulting from an additional factor unit employed. the total value of the total output of a firm divided by the total quantity of output. the marginal revenue of the product divided by the additional output resulting from an additional factor unit employed. a measure of additional revenue minus additional cost as a result of additional output. the value of an additional unit of product as measured in terms of additional factor cost.

Explanation / Answer

The correct choice is a

Explanation : - Value Marginal Product ( VMP) is equal to the price of the product multiplied by the marginal physical product of the factor . VMP is a measure of the value that each factor unit adds to the firm's product . A firm wants to know the VMP of a factor because it helps in deciding how many units of the factor to hire .

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