As More Output Is Produced, the Marginal Product of Labour

question 13

Multiple Choice

As more output is produced, the marginal product of labour declines

• A)because of the law of diminishing returns.
• B)if firms reduce the wage paid to labour.
• C)if the firm's output supply curve is inelastic.
• D)because the firm's marginal revenue declines.

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Definitions:

Psychological Pricing

Encouraging purchases based on emotional rather than rational responses to the price.

Seasonal Discount Pricing

A pricing strategy where companies offer discounts on their products or services during certain times of the year.

Penetration Pricing

A marketing strategy where the price of a product is set lower than the competitors' prices in order to quickly gain market share or attract customers.