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Under Certain Conditions, the Slope of the Marginal Revenue Product

Question 132

Multiple Choice

Under certain conditions, the slope of the marginal revenue product curve reflects the combined effects of diminishing marginal returns and a declining price of the product the firm sells.What are these conditions?


A) The firm must be a price searcher in both the product market and the resource market.
B) The firm must be a price searcher in the product market, regardless of whether it is a resource price searcher.
C) The firm must be a price searcher in the product market but not necessarily in a perfectly competitive resource market.
D) The firm must be a price searcher in a perfectly competitive product market.
E) The firm must operate in a decreasing-cost industry.

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