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Q. Product of marginal revenue?
MRPL is the product of marginal revenue and marginal product of labour or MRPL = MR x MPL.
• Derivation:
MR = ?TR/?Q
MPL = ?Q/?L
MRPL = MR x MPL = (?TR/?Q) x (?Q/?L) = ?TR/?L
Relationship between AC, AVC, AFC and MC is elucidated graphically by drawing respective cost curves in Figure below. Behaviour of cost curves is elucidated below. Figure:
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