Why does the marginal revenue product (MRP) curve slope downward for a perfectly competitive firm?
A) Because MRP = MR x MPP.After some point, as more of a factor is employed, the lower its MPP is; thus MRP declines.
B) Because MRP = MFC x MPP.After some point, as more of a factor is employed, the lower its MFC is; thus MRP declines.
C) Because MRP = MR x MPP.After some point, MR declines for a product price taker; thus, MRP declines.
D) Because MRP = MFC x MR.After some point, MFC and MR decline; thus, MRP declines.
Correct Answer:
Verified
Q24: A firm that is perfectly competitive will
Q25: Exhibit 26-1 Q26: A firm will maximize its profits by Q27: The addition to total cost that results Q28: Marginal factor cost (MFC) is Q30: The firm's factor demand curve is the Unlock this Answer For Free Now! View this answer and more for free by performing one of the following actions Scan the QR code to install the App and get 2 free unlocks Unlock quizzes for free by uploading documents
![]()
A)the additional cost
A)MRP