Given That a Firm Is Selling Its Product in a Competitive

question 107

Multiple Choice

Given that a firm is selling its product in a competitive market,meaning that its marginal revenue is constant,what would the Law of Diminishing Returns to labor inputs imply about the demand for labor?

• A)That the demand for labor would be constant if the market is stable
• B)That the firm would pay increasing wages to attract qualified employees
• C)The demand would diminish with the output of new workers
• D)The demand curve for labor has a negative slope resulting from declining marginal product
• E)The Law of Diminishing Returns has no effect on labor demand

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