Asked by Maryam Ahsan on May 30, 2024
Verified
The marginal revenue product curve for an input is downsloping because of the law of diminishing returns.
Marginal Revenue Product
The additional revenue generated from employing one more unit of a resource, such as labor or capital.
Law of Diminishing Returns
An economic principle stating that as one input in the production process is incrementally increased, holding all other inputs constant, there will be a point at which the added output from each additional unit of input will start to decrease.
- Acquire knowledge about the significance of the marginal revenue product curve in influencing the demand for inputs.
Verified Answer
AA
Andrew AdamsomJun 02, 2024
Final Answer :
True
Explanation :
The marginal revenue product curve for an input is downsloping because, due to the law of diminishing returns, each additional unit of input contributes less to total output, reducing the additional revenue generated by further input use.
Learning Objectives
- Acquire knowledge about the significance of the marginal revenue product curve in influencing the demand for inputs.