A firm's demand curve for labor in a perfectly competitive market is the downward-sloping portion of its _____ curve.
A)marginal revenue
B)average total cost
C)value of the marginal product of labor
D)total revenue

Question

Quizplus · Accepted Answer

The value of the marginal product (VMP) of labor curve represents the additional output the firm receives for each additional unit of labor hired. The firm will hire labor as long as the VMP is greater than or equal to the wage rate. The firm's demand for labor is thus determined by the downward-sloping portion of the VMP curve. The other choices are not directly related to the firm's demand for labor.

A Firm's Demand Curve for Labor in a Perfectly Competitive