The marginal revenue product of labor curve is an individual firm's labor demand curve.

Question

Quizplus · Accepted Answer

This is true, as the marginal revenue product of labor (MRPL) represents the additional revenue generated from adding one more unit of labor. Therefore, as the wage rate (the price of labor) increases, the MRPL curve will shift down and to the left, indicating a decrease in the amount of labor demanded by the firm. This relationship between wage and labor demand is captured in the firm's labor demand curve.

The Marginal Revenue Product of Labor Curve Is an Individual