Which of the following is correct regarding the demand curve for labour?
A)It is the upward portion of the MP curve.
B)It is the downward portion of the MP curve.
C)It is the downward portion of the MRP curve.
D)It is the downward portion of the TP curve.

Question

Quizplus · Accepted Answer

The demand curve for labour is derived from the marginal revenue product (MRP) curve. It represents the various quantities of labour that employers are willing and able to hire at different wage rates in a given period of time. As the wage rate increases, the MRP of labour tends to decrease, leading to a downward sloping demand curve for labour. The MP (marginal product) curve only shows the relationship between labour input and output, but does not incorporate the factor of wage rate. Therefore, choices A, B, and D are incorrect.

Which of the Following Is Correct Regarding the Demand Curve