Which of the following is not true about the demand for factors of production?
A)It is derived from the demand for the goods and services the firm produces.
B)It is a function of diminishing marginal physical product.
C)It depends on the firm's expected sales and output.
D)It is a function of the elasticity of supply.

Question

Quizplus · Accepted Answer

The demand for factors of production is not influenced by the elasticity of supply, as supply elasticity only affects the price of the factors of production. Factors of production are demanded by firms based on the quantity of goods and services they expect to produce and sell, and the marginal product of each factor, which can eventually decline due to the Law of Diminishing Marginal Returns. Therefore, choices A, B, and C are all true statements about the demand for factors of production.

Which of the Following Is Not True About the Demand