Businesses calculate additional output produced by adding one production-factor unit {marginal product}|. Revenue derived from extra output {marginal revenue product, price} equals price and marginal cost. Factor increases in marginal product if other factors increase, quality increases, new technology works with that factor, factor is important in overall economy, or factor has limited amounts. Factors can have fixed supply and be capable of only one use: houses, zoned land, and people with unique talents.
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6-Economics-Microeconomics-Finance-Margins
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Date Modified: 2022.0224