A firm's labor demand curve is also its marginal revenue product curve. For both the perfectly competitive firm and the output price maker, the labor demand curve slopes downwards.
However, there is a difference in the reasons why the labor demand curve slopes downwards. What is this difference?
Question 2
Diseconomies of scale occur when
A) long-run average costs fall as a firm expands its plant size.
B) long-run labor costs rise as a firm increases its output.
C) short-run average costs rise as a firm expands its plant size.
D) long-run average costs rise as a firm increases its output.