Question

Did the decline in the global price of oil reduce marginal revenue product by reducing marginal revenue from the sale of oil or the marginal product of labor provided by oil workers? Explain.

Short answer

The additional revenue generated by using one more unit of resource is referred to as the marginal revenue product. Each firm reduces its output by moving down its marginal cost curve.

Step-by-step solution

Introduction.

The increased income engendered with using another one unit of resource is referred to as the marginal revenue product.

MRP is used to make critical business production decisions and determine the optimal level of a resource.

Marginal product of Labor.

The products subject of laborer's is determined by dividing in outcome by the transformation in labour, everything else being equal.

Explanation.

Market prices of goods fall when demand falls, and quantity falls when demand rises. When the price equals the marginal revenue, a decrease in the price equals a decrease in the marginal revenue.