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.

---

Definitions:

Obsessive-compulsive

Relating to or characterized by persistent, unwanted thoughts (obsessions) and repetitive, ritualistic behaviors (compulsions) which one feels driven to perform.

Ritualistic Behavior

Repeated actions performed in a specific sequence, often with symbolic meaning, and sometimes related to cultural or religious practices.

Stubborn

Showing determination not to change one's attitude or position on something, especially in spite of good arguments or reasons to do so.

Customary Pricing

Setting prices based on what is traditionally expected or accepted within the market or among competitors.