A firm's demand curve for labour is:
A) its marginal cost curve.
B) its marginal product curve.
C) its value of the marginal product of labour curve.
D) horizontal if it is in perfect competition.

Question

Quizplus · Accepted Answer

The value of the marginal product of labour (VMPL) is the additional revenue generated when one more unit of labour is added. The firm's demand for labour is derived from this curve, which shows the maximum amount the firm is willing to pay for each unit of labour. As such, the correct answer is C.

A Firm's Demand Curve for Labour Is