Given that a firm is selling its product in a competitive market,meaning that its marginal revenue is constant,what would the Law of Diminishing Returns to labor inputs imply about the demand for labor?

Question

Quizplus · Accepted Answer

The Law of Diminishing Returns states that as additional units of a variable input, such as labor, are added to fixed inputs, the marginal product of the variable input initially increases, but eventually decreases. This implies that the marginal product and marginal revenue product of labor decrease as more workers are hired. As a result, the firm's demand for labor would also decrease, where the demand curve for labor has a negative slope resulting from declining marginal product.

Given That a Firm Is Selling Its Product in a Competitive