For a perfectly competitive firm, the value of the marginal product of labor falls as more workers are hired because of the diminishing

Question

Quizplus · Accepted Answer

The law of diminishing marginal returns states that as the quantity of one factor of production (in this case, labor) is increased while all other factors of production remain constant, the marginal increase in output from each additional unit of the variable factor will eventually decrease. This means that the value of the marginal product of labor, which is the additional output generated by one additional unit of labor, will decrease as more workers are hired. So, the correct answer is B, the marginal physical product of labor.

For a Perfectly Competitive Firm, the Value of the Marginal