Chapter 69, Problem 6MCQ

To determine

The curve which represents an individual firm’s demand curve for labor.

Answer to Problem 6MCQ

From the available options, the correct option is the marginal revenue product of labor.

Explanation of Solution

The marginal revenue curve uses the market price which means it is incorrect. And, the marginal product of labor uses a fixed level of capital input, the average revenue uses the total quantity of goods sold, and the average revenue curve represents the average amount of output which means all options a, b, d, and e are not correct.

But the marginal revenue product of labor represents the demand for labor by specifying the relationship between the quantity of labor and the wage rate for a firm.

Therefore, the correct option is c (marginal revenue product of labor).

Economics Concept Introduction

Introduction: Marginal revenue is the earning or benefit which is obtained by using an additional unit of the product or factor of production.

A demand curve is a graphical representation that shows how sensitive demand is toward the price of a good or service.