Why does an individual firm’s demand curve for a factor of production behave as it does?

1. A Option A: It is perfectly elastic (horizontal) if the factor market is perfectly competitive
2. B Option B: It slopes upward due to the factor's increasing marginal product
3. C Option C: It slopes downward because more output lowers the price at which output can be sold in a competitive market, reducing the value of the marginal product as more of the factor is used
4. D Option D: It slopes downward due to the factor's diminishing marginal product

Answer checked 11 October 2026 · How we write and check questions