The perfectly competitive firm's short-run demand for labor is downward sloping because

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The perfectly competitive firm's short-run demand for labor is based on the marginal productivity of labor, which eventually diminishes as the firm hires more and more workers. This is due to the law of diminishing marginal productivity, where the additional output generated by each additional unit of labor becomes smaller and smaller. As a result, the firm's demand curve for labor is downward sloping, indicating that it will purchase less labor at higher wages and more labor at lower wages. The other choices are not explanations for the downward slope of the demand curve for labor.

The Perfectly Competitive Firm's Short-Run Demand for Labor Is Downward