For a competitive firm, the price of its output _______ with each additional worker hired, and the marginal product of labor _______ with each additional worker hired.

Question

Quizplus · Accepted Answer

In a competitive market, the price of output remains constant regardless of how many workers are hired because individual firms are price takers. The marginal product of labor typically decreases with each additional worker due to the law of diminishing returns.

For a Competitive Firm, the Price of Its Output _______