A factor demand curve will shift because of:
A) the slope of the MP curve.
B) the elasticity of demand for the final product.
C) the proportion of the factor's cost relative to total cost.
D) a change in the product demand.

Question

Quizplus · Accepted Answer

A factor demand curve represents the demand for a factor of production based on the demand for the final product. Therefore, a change in the product demand will cause a shift in the factor demand curve. For example, an increase in demand for a product will increase the demand for the factors of production used in that product’s production process.

A Factor Demand Curve Will Shift Because Of