A Reason Why a Perfectly Competitive Firm's Demand for Labour

question 185

Multiple Choice

A reason why a perfectly competitive firm's demand for labour curve slopes downward is that

• A)each additional unit of labour hired is less efficient than previously hired units.
• B)in the short run, as more labour is hired, labour's marginal product falls because of the law of diminishing returns.
• C)the extra cost of hiring additional units of labour increases as a firm hires more units of labour.
• D)the firm's demand curve for the product that uses labour is downward sloping.

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