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

question 70

Multiple Choice

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

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

---

Definitions:

High-Involvement MSG

Pertains to management strategies that focus on engaging employees deeply in the decision-making process, improving motivation, satisfaction, and performance.

Indirect Pay

Benefits and compensations provided to employees that are not monetary wages, including insurance policies, retirement plans, and vacation time.

Employer-Employee

The formal relationship between a worker and a company or individual that hires them for wages or salary, under which work is performed.

Labour Flexibility

The ability of a workforce to adapt to changes and demands in the workplace, including varied job functions, working hours, and employment conditions.