Chapter 71, Problem 5MCQ

To determine

The curves whose intersection will determine the quantity of labor demanded in an imperfectly competitive factor market

Answer to Problem 5MCQ

From the available options, the correct option is marginal revenue product and marginal factor cost.

Explanation of Solution

Marginal revenue product and marginal factor cost curve are the curves that help to determine the quantity of labor demanded in an imperfectly competitive factor market at the point where they intersect. The marginal revenue product curve delivers the relationship between the quantity of variable input and marginal revenue product. And, the marginal factor cost curve represents the relationship between elation the marginal factor cost, and the quantity of the resource, which are used by the firm. Therefore, the intersection of other curves such as supply, and marginal product cannot determine the quantity of labor demanded in this market.

Here, the correct option is d (marginal revenue product and marginal factor cost).

Economics Concept Introduction

Introduction: Imperfect market refers to a market in which competition for market share, and involves few buyers and sellers, barriers to entry and exit, and there are different products and services in the market.