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Where Should a Producer Stop Devoting More of His Spending

Question 24

Multiple Choice

Where should a producer stop devoting more of his spending on labor if initially the MRP of the additional dollar spent on labor is higher than the MRP of the additional unit spent on tools?


A) MRP/$ of additional labor falls below MRP/$ of additional tools.
B) MRP/$ of additional capital increases above MRP/$ of additional tools.
C) MRP/$ of additional labor becomes equal to MRP/$ of additional tools.
D) MRP/$ of the additional labor falls to zero.

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