For a perfectly competitive firm, the value of marginal product diminishes as employment increases because the
A) price falls as the firm's production increases.
B) marginal revenue decreases as the firm's production increases.
C) marginal product decreases as the firm's production increases.
D) None of the above answers is correct.
C
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If the production of a good involves positive externalities, ________
A) the market price of the good is higher than its optimal price B) the market price of the good is lower than its optimal price C) the average cost of production of the good in the long run is zero D) the variable cost of production of the good is zero
One of the important points of criticism of industrial policy is that: a. it can lead to stiff competition among the domestic firms in an economy. b. small domestic firms will not be able to survive economic clustering
c. government sponsored research will end up benefitting foreign countries. d. it can prohibit regional innovations. e. the knowhow in one firm will not spill over to other firms in an economy.