The more inelastic the demand for a resource, the
A)less elastic its marginal revenue product curve.
B)more elastic its marginal revenue product curve.
C)greater the potential for resource substitution.
D)greater the productivity of the resource.

Question

Quizplus · Accepted Answer

The more inelastic the demand for a resource, the less elastic its marginal revenue product curve. This is because the marginal revenue product (MRP) curve reflects the additional revenue generated by employing one more unit of the resource. If demand for the resource is inelastic, changes in its price do not significantly affect the quantity demanded, leading to a less elastic MRP curve.

The More Inelastic the Demand for a Resource, the