Just as the derived demand for labor is obtained from its marginal product curve, so the demand for capital goods is derived from its marginal product curve.

Question

Quizplus · Accepted Answer

This statement is true. The demand for capital goods is derived from its marginal product curve, which shows the additional output that can be produced by using one additional unit of capital. Similar to labor, firms will demand capital up to the point where the marginal product of capital equals the price of capital.

Just as the Derived Demand for Labor Is Obtained from Its