The negative slope of the labor demand curve can be attributed to ________.

Question

Quizplus · Accepted Answer

The negative slope of the labor demand curve is a result of the Law of Diminishing Marginal Returns, which states that as more units of a variable input (such as labor) are added to a fixed input (such as capital), the marginal product of that input will eventually decrease. Therefore, employers will demand less labor as the cost of hiring additional workers exceeds the additional revenue generated by their marginal product.

The Negative Slope of the Labor Demand Curve Can Be