The labor demand curve of a firm that sells its product in a purely competitive market
A) is horizontal or perfectly elastic.
B) is downsloping and flatter than the labor demand curve of a firm that sells its product in an imperfectly competitive (or monopolistic) market.
C) is upsloping.
D) is downsloping and steeper than the labor demand curve of a firm that sells its product in an imperfectly competitive (or monopolistic) market.

Question

Quizplus · Accepted Answer

In a purely competitive market, the labor demand curve is downsloping and flatter because the firm is a price taker and can sell additional output at the market price, leading to a marginal revenue product that declines more slowly compared to a firm in an imperfectly competitive market.

The Labor Demand Curve of a Firm That Sells Its