A firm's demand for labor is downward sloping because of
A)diminishing marginal productivity of labor.
B)diminishing marginal utility.
C)price pressure.
D)workers' increased willingness to work at a higher wage.

Question

Quizplus · Accepted Answer

When additional units of labor are added to production, eventually there will be a diminishing marginal productivity of labor. This means that each additional unit of labor added will produce less output than the previous unit of labor added. As a result, the marginal revenue product of labor will decline, leading to a downward sloping demand for labor.

A Firm's Demand for Labor Is Downward Sloping Because of