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Under conditions of perfect competition in the product market

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Under conditions of perfect competition in the product market

A).  MRP = VMP

B).  MRP > VMP

C).  VMP > MRP

D).  None of the above


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 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).

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