Which of the following best describes the marginal revenue product (MRP) schedule in microeconomics?

• A. A table showing the average revenue per unit of input
• B. A table showing the additional cost incurred by producing one more unit of output
• C. A table showing the total revenue earned from all units of input
• D. A table showing the additional revenue generated by employing one more unit of input

Answer: (D)

Verified step by step guidance

1. Understand the concept of Marginal Revenue Product (MRP): MRP measures the additional revenue a firm earns by employing one more unit of an input, holding other inputs constant.
2. Recall the formula for MRP: \(\text{MRP} = \text{Marginal Product (MP)} \times \text{Marginal Revenue (MR)}\) where MP is the additional output from one more unit of input, and MR is the additional revenue from selling one more unit of output.
3. Recognize that the MRP schedule is a table or curve that shows how much extra revenue each additional unit of input generates, not average revenue or total revenue.
4. Compare the options given: the correct description should reflect the additional revenue from one more unit of input, which aligns with the definition of MRP.
5. Conclude that the best description of the MRP schedule is 'A table showing the additional revenue generated by employing one more unit of input' because it directly relates to the marginal concept in revenue product.