Table 11.10

-Refer to Table 11.10.The firm's demand curve for a resource is the _____
A)average total cost curve.
B)average variable cost curve.
C)marginal revenue product curve.
D)marginal resource cost curve.
E)average fixed cost curve.

Question

Table 11.10
 
-Refer to Table 11.10.The firm's demand curve for a resource is the _____
A)average total cost curve. 
B)average variable cost curve. 
C)marginal revenue product curve. 
D)marginal resource cost curve. 
E)average fixed cost curve.

Quizplus · Accepted Answer

The marginal revenue product curve shows the additional revenue generated by hiring one more unit of a resource. This curve represents the firm's demand for the resource, as the firm will continue to hire resources up to the point where the marginal revenue product equals the resource's price (i.e. the wage rate). The other curves listed are not relevant for determining the firm's demand for a resource.

Table 11.10 -Refer to Table 11.10.The Firm's Demand Curve for a Resource