Answer:
Marginal physical product (MPP) is the additional output produced by using one more unit of a specific input (such as labor or capital) while keeping all other inputs constant. Converting MPP into a monetary figure involves multiplying the MPP by the price of the output produced by that input. Here are some ways to do that:
Calculate Marginal Revenue Product (MRP): The marginal revenue product (MRP) is the additional revenue generated by using one more unit of a specific input, while keeping all other inputs constant. To convert MPP into a monetary figure, we can multiply it by the price of the output produced by that input. MRP = MPP x Price of output
Determine Marginal Cost (MC): The marginal cost (MC) is the cost of producing one more unit of output. To convert MPP into a monetary figure, we can multiply it by the marginal cost of producing that output. MC = MPP x Marginal cost of output
Calculate Marginal Value Product (MVP): The marginal value product (MVP) is the additional value created by using one more unit of a specific input, while keeping all other inputs constant. To convert MPP into a monetary figure, we can multiply it by the value created by that input. MVP = MPP x Value created by input
By converting MPP into a monetary figure, we can evaluate the profitability of using different inputs and make more informed decisions about production and resource allocation.
Step-by-step explanation: