The Factor Demand Curve Shifts Leftward as a Result of

question 2

Multiple Choice

The factor demand curve shifts leftward as a result of

• A)an increase in the price of the product the factor helps to produce.
• B)an increase in the marginal physical product of the factor.
• C)a decrease in the price of the product the factor helps to produce.
• D)an increase in the wage rate.

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Definitions:

Fixed Costs

Expenses that do not change in proportion to the level of production or sales, such as rent, salaries, and insurance premiums.

Selling Price

The cost incurred by the customer for acquiring a product or service.

Variable Production Costs

Expenses that vary directly with the volume of production or sales, like direct labor and raw materials.

Fixed Monthly Cost

Regular expenses that do not fluctuate with production volume or sales, such as rent, salaries, and insurance, billed on a monthly basis.