The labor demand curve of an imperfectly competitive seller is downsloping
A)solely because of diminishing marginal utility.
B)because of both diminishing returns and the necessity to lower price to sell more output.
C)solely because product price must be reduced to sell more output.
D)solely because of diminishing returns.

Question

Quizplus · Accepted Answer

The labor demand curve of an imperfectly competitive seller is downsloping because of diminishing returns, which means that adding more labor eventually leads to less additional output, and because to sell more output, the seller must reduce the price, affecting the revenue generated per additional unit of labor.

The Labor Demand Curve of an Imperfectly Competitive Seller Is