A Firm's Demand for Labor Is Referred to as a Derived

question 124

Multiple Choice

A firm's demand for labor is referred to as a derived demand because

• A)It is derived from the MPP of labor.
• B)It is derived from the demand for the product that the labor is producing.
• C)The quantity of goods and services labor can purchase is derived from the wages labor receives from the firm.
• D)It is derived from the supply of labor.

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Definitions:

Firm

A business organization, such as a corporation, partnership, or sole proprietorship, that sells goods or services to consumers in exchange for money.

Total Profit

The overall financial gain made by a business after subtracting all costs from the total revenue generated from its operations.

AVC

Average Variable Cost; the total variable cost divided by the quantity of output produced.

ATC

Stands for "Average Total Cost," which refers to the total cost divided by the quantity of goods produced, in economics.