Why Does the Marginal Revenue Product (MRP) Curve Slope Downward

question 97

Multiple Choice

Why does the marginal revenue product (MRP) curve slope downward for a perfectly competitive firm?

• A)Because MRP = MR x MPP.After some point, as more of a factor is employed, the lower its MPP is; thus MRP declines.
• B)Because MRP = MFC x MPP.After some point, as more of a factor is employed, the lower its MFC is; thus MRP declines.
• C)Because MRP = MR x MPP.After some point, MR declines for a product price taker; thus, MRP declines.
• D)Because MRP = MFC x MR.After some point, MFC and MR decline; thus, MRP declines.

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