Other things equal, the resource demand curve of an imperfectly competitive seller will
A) lie below its marginal revenue product curve.
B) be subject to increasing marginal productivity.
C) be less elastic than that of a purely competitive seller.
D) be more elastic than that of a purely competitive seller.

Question

Quizplus · Accepted Answer

An imperfectly competitive seller has some degree of market power, which means they can influence the price of their product. Therefore, their resource demand curve will be less elastic than that of a purely competitive seller, as they have less substitutes available in the market. The other options are incorrect as the resource demand curve of an imperfectly competitive seller may not necessarily lie below its marginal revenue product curve and may or may not be subject to increasing marginal productivity.

Other Things Equal, the Resource Demand Curve of an Imperfectly