Which answer below correctly describes the relationship between the demand for labour curve and the value of marginal product curve for a firm in a competitive labour market?
A) The curves intersect to determine the equilibrium quantity of labour.
B) The value of marginal product curve lies to the right and above the demand for labour curve.
C) The value of marginal product curve lies to the left of the demand for labour curve.
D) The curves are the same.

Question

Quizplus · Accepted Answer

In a competitive labour market, the demand for labour curve for a firm is determined by the value of the marginal product of labour. This means that the firm's demand for labour is based on how much additional revenue the next worker would bring in. Therefore, the demand for labour curve and the value of marginal product curve are the same, as both are based on the marginal productivity of labour.

Which Answer Below Correctly Describes the Relationship Between the Demand