An Decrease in the Productivity of a Factor of Production

question 80

Multiple Choice

An decrease in the productivity of a factor of production will

• A) shift its marginal revenue product curve to the right.
• B) shift its marginal revenue product curve to the left.
• C) cause a firm to move down the marginal revenue product curve.
• D) cause a firm to move up the marginal revenue product curve.

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Definitions:

MC

In economics, MC stands for Marginal Cost, which is the cost of producing one additional unit of a good or service.

Variable Costs

Costs that change in proportion to the level of goods or services that a business produces.

Product Demand Curves

Graphical representations showing the relationship between the price of a product and the quantity of the product demanded.

Normal Profit

The minimum profit necessary for a company to remain competitive in the market; it occurs when total revenue equals total costs.