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Why Is the Marginal Revenue Product Curve of a Factor

Question 2

Multiple Choice

Why is the marginal revenue product curve of a factor negatively sloped?


A) Additional revenue generated from an additional unit of a factor remains constant as more resources are hired.
B) Additional revenue generated from an additional unit of a factor declines as more resources are hired.
C) Additional revenue generated from an additional unit of a factor usually becomes zero as more resources are hired.
D) Additional revenue generated from an additional unit of a factor increases as more resources are hired.
E) Additional revenue generated from an additional unit of a factor doubles every time new resources are hired.

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