Econ 102 quiz 6

Econ 102 quiz 6 1 ECON 102, Sec 02_Quiz 6 with Answers The demand for a factor of production is based on a firm’s decision to supply a good to the output markets. For this reason the demand for the factors of production are called derived demands The demands for the factors of production are derived from the firm’s decision to supply output in the goods market. The additional revenue earned by the last extra worker hired is referred to as the marginal revenue product of labor The marginal revenue product of labor is the additional revenue generated by the last worker hired. A profit maximizing firm that has labor as the only variable factor of production has a demand curve that is equal to the marginal revenue product of labor The labor demand curve is the same as the marginal revenue product of labor for a profit maximizing firm in a competitive market.