The Diagram Below Shows the MRP Curve for a Firm

question 69

Multiple Choice

The diagram below shows the MRP curve for a firm producing copper plumbing pipe.The factor of production being considered here is hours of labour. FIGURE 13-1
-Refer to Figure 13-1.Suppose this firm initially has the marginal revenue product curve MRP₁.One reason that the curve could shift to MRP₂ is

• A)a decrease in demand for the firm's output,copper plumbing pipe.
• B)an increase in the supply of labour.
• C)a decrease in the wage rate.
• D)a decrease in the market price of copper plumbing pipe.
• E)an improvement in workers' human capital.

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Definitions:

Monopolistic Competition

A market structure where many firms sell products that are similar but not identical, allowing for competition based on price, quality, and brand.

Variety

Variety in the context of economics refers to the range of different products or services available in a market, catering to diverse consumer preferences and contributing to market competition.

Minimum Wage

The lowest legal salary that employers can pay their workers, aimed at protecting workers from unduly low pay.

Highly Capitalized

Describes companies or financial institutions that possess a large amount of capital, either through equity or debt, which often provides stability.