An Individual Firm's Demand for a Factor of Production

question 8

Multiple Choice

An individual firm's demand for a factor of production

• A) slopes downward because an increase in the production of output reduces the price at which the output can be sold in a competitive market, thereby reducing the value of the marginal product as more of the factor is used.
• B) slopes downward due to the factor's diminishing marginal product.
• C) slopes upward due to the factor's increasing marginal product.
• D) is perfectly elastic (horizontal) if the factor market is perfectly competitive.

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Definitions:

Compliance Reports

Documents that outline whether a company or individual is adhering to regulations and standards.

Government Agencies

Organizations at the federal, state, or local level that administer specific functions and services on behalf of the government.

Parent Companies

Corporations that own a controlling interest in one or more subsidiary businesses.

Problem-Factoring Process

A methodical approach to solving problems by breaking them down into smaller, more manageable components.