For a competitive profit-maximizing firm, the value-of-the-marginal-product curve for capital is the firm's ?
Correct answer: B. demand curve for capital
- A. supply curve of capital
- B. demand curve for capital
- C. production function
- D. marginal cost curve
Explanation
A competitive firm hires capital up to the point where the value of its marginal product equals the rental price of capital. Therefore, the value-of-the-marginal-product curve shows the firm's demand for capital.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
Practise Microeconomics
1,742 free Microeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Microeconomics questions
An individual firm's demand for a factor of production ?
A competitive profit-maximizing firm should hire workers up to the point where ?
An increase in the price of automobiles shifts the demand for autoworkers to the ?
If a factor exhibits diminishing marginal product, hiring additional units of the factor will ?
When capital is owned by the firm as opposed to being directly owned by household capital income may take any of the following forms except ?
Which of the following is not true with regard to workers who have a high value of marginal product? These workers ?