Under conditions of perfect competition in the product market
A). MRP = VMP
B). MRP > VMP
C). VMP > MRP
D). None of the above
MRP = VMP
Under conditions of perfect competition in the product market MRP = VMP. Under the assumption of perfect competition a firm employs a factor up to that number at which the price of the factor is just equal to the value of the marginal product (=MRP of the factor).