If Product Demand Decreases and Product Price Decreases

question 106

Multiple Choice

If product demand decreases and product price decreases,

• A) the marginal revenue product curve will shift to the right.
• B) the marginal revenue product curve will shift to the left.
• C) the firm will move down the marginal revenue product curve and hire more units of the input.
• D) the firm will move up the marginal revenue product curve and hire fewer units of the input.

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Definitions:

Service Revenue

Service revenue is the income a company generates from providing services, as opposed to selling physical goods.

Asset Increase

A rise in the total value of a company's assets, which can result from additional investments, improved asset values, or acquisition of new assets.

Creditor

An individual or institution to which money is owed.

Expense

A financial outlay that is incurred through business operations or activities.