Question

The MRP curve of the imperfect competitor declines more steeply than that of the perfect competitor because the imperfect competitor must lower price to sell additional output.

True

False

Which of the following is NOT one of the reasons for changes in resource demand?       

Changes in demand for the final product

Productivity changes

Changes in the prices of other resources

All of the above

The Marginal Revenue Schedule is a firm's:

demand schedule for a resource

supply schedule for a resource

quantity schedule for a resource

price schedule for a resource

____________________ dictates that if the price of a resource rises, other resources will be substituted for it.

derived demand              

marginal revenue product

substitution effect

output effects

_______________ says that if a price of a resource rises, output of the final product will decline.

derived demand              

marginal revenue product

substitution effect

output effect

Answer 1

1. TRUE the MRP curve of the imperfect competitor declines more steeply than that of perfect competitor because the imperfect competitor must lower the price to sell additional output.

2. Changes in the demand for the final product , productivity changes and changes in the prices of other resources all are the reasons for changes in resource demand.

3. The marginal revenue schedule is a firm's demand schedule for a resource. Hence, option(A) is correct.

4. Substitution effect dictates that if the price of a resource rises , other resources will be substituted for it. Hence, option(C) is correct.

5. Derived demand says that if a price of a resource rises, output of the final product will decline. Hence, option(A) is correct.

answered by: anonymous