The labor demand curve of a purely competitive seller
A)slopes downward because the firm must lower price to sell more output.
B)slopes downward because labor productivity increases as successive workers are hired.
C)is perfectly elastic because the firm is hiring an insignificant portion of the total labor supply.
D)slopes downward because the marginal product of successive workers declines.

Question

Quizplus · Accepted Answer

The labor demand curve slopes downward because, in a purely competitive market, the marginal product of labor decreases as more workers are hired, leading to a decrease in the additional output produced by each additional worker.

The Labor Demand Curve of a Purely Competitive Seller