Assume a decrease in product (output) demand. As a result, in the short run, ass

Question

Assume a decrease in product (output) demand. As a result, in the short run, assuming that the firm continues to produce, the firm will
A. produce more since the price of the variable input will have fallen
B. produce the same amount but earn higher economic profits
C. hire less of the variable input since the price of the variable input has increased
D. Hire less of the variable since the marginal revenue product of that input has decreased
E. Hire less labor and less capital to reduce its operations

Explanation / Answer

D. Hire less of the variable since the marginal revenue product of that input has decreased the company will hire less variable so as to cope up with less demand keeping its losses minimum PLEASE RATE

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