marginal factor cost

marginal factor cost (MFC)

the extra cost incurred by a firm in using one more unit of a FACTOR INPUT. Marginal factor cost together with the MARGINAL REVENUE PRODUCT of a factor, indicate to a firm how many factor inputs to employ in order to maximize profits.
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According to Khurso (1964) and Olukosi & Ogungbile (1989), the emphasis of resource use is on marginal productivity because it is the most economical and optimal way to maximize net output in farming and it is obtained by relating the marginal value product to the input price, also called the marginal factor Cost (MFC).
The entire basis of labor economics is that a firm will hire an employee as long as the employee's marginal revenue product, the value he produces, is at least as great as his marginal factor cost, or his wage/salary.
Allotment efficiency occurs when a firm chooses resources and enterprises in such a way that a given resource is considered efficiently utilized in production if its marginal value product (MVP) is equal to its marginal factor cost (MFC) [10, 14].
r = efficiency ratio; MVP = marginal value product of the variable input; MPP = marginal physical product; MFC = marginal factor cost, [P.
He interprets this to mean that Marshall had in mind, to use modern terminology, a 'marginal factor cost' equals 'marginal revenue product' construction and was well aware that differences between price and marginal revenue (in the product market) and the wage and marginal factor cost (in the factor market) could be significant in a single-price market.
2] In one or more input markets, including the labor market, the firm is assumed to perceive that a rising supply price causes marginal factor cost to exceed average factor cost.
L], and L are marginal factor cost, average factor cost, and quantity of a specific factor (L = 1, 2,.
The term in brackets is the marginal factor cost (MFC).
To see this, observe first that the cartel correctly understands that the marginal factor cost equals the marginal cost of expanding the variable input L.
5) As a result, the marginal factor cost curve for organs faced by the monopsonist hospital will exhibit a gap at this level of organ procurement.
T],(6) while the marginal factor cost of organs is zero up to [Mathematical Expression Omitted].
The location effect of wage discrimination on employment can be depicted more clearly by using the SMFC-DMFC (simple monopsonist's marginal factor cost curve-discriminating monopsonist's marginal factor cost curve) approach, [2; 3].