COSTS AND REVENUES The revenue a resource earns for a firm is the marginal revenue product or MRP. The cost to a firm for using that resource is the marginal resource cost or MRC. Based on relative costs and revenues, a firm will want to increase or decrease their use of the resource. This happens in a few different ways. In the following questions, we'll be looking at how firms use capital and labor. o Example Question Give an example of a firm that should increase its use of capital and decrease its use of labor. o Example Answer Labor: $8MRP - $15MRC Capital: $8MRP - $4MRC 1.) Give an example of a firm that should maintain its use of capital but increase its use of labor. 2.) Give an example of a firm that should has minimized costs but not maximized profits. 3.) Give an example of a firm that has maximized profits. 4.) Give an example of a firm that should decrease its use of both capital and labor. 5.) For your example in question 2, what is the most the company could potentially pay its employees