The MRP curve for labor
A)is downsloping and shows the relationship between wage rates and the quantity of labor demanded.
B)is perfectly elastic if the firm is selling its output competitively.
C)is upsloping and lies above the labor supply curve.
D)will shift location when the wage rate changes.

Question

Quizplus · Accepted Answer

The MRP (Marginal Revenue Product) curve for labor is downsloping because it shows the additional revenue a firm earns from hiring one more unit of labor, and this typically decreases as more labor is hired. It reflects the relationship between wage rates and the quantity of labor demanded, where a higher wage rate typically leads to a lower quantity of labor demanded.

The MRP Curve for Labor