A firm's demand curve for an input in a perfectly competitive market is the downward-sloping portion of its:
A) marginal revenue curve.
B) average total cost curve.
C) marginal revenue product curve.
D) total revenue curve.

Question

Quizplus · Accepted Answer

In a perfectly competitive market for an input, the marginal revenue product (MRP) curve determines the value of the marginal product of labor (or any input) at each level of employment. The firm's demand curve is the downward-sloping portion of the MRP curve, which shows how much of the input the firm is willing to hire at each possible wage rate. The other options are not correct because the marginal revenue, average total cost, and total revenue curves do not directly relate to the firm's demand for an input in a perfectly competitive market.

A Firm's Demand Curve for an Input in a Perfectly