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.

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