In the Following Figure, the First Panel Shows a Market

In the following figure, the first panel shows a market situation prior to regulation and the second panel shows the effects of regulation.Figure 14.2
In the figure,
D: Demand curve for automobiles
S₁: Supply curve of automobiles prior to regulation
S₂: Supply curve of automobiles after regulation
FG: Clean up cost per unit
-The marginal revenue product curve of a factor is negatively sloped because:

A) the additional revenue generated from an additional unit of a factor remains constant as more resources are hired.
B) the additional revenue generated from an additional unit of a factor declines as more resources are hired.
C) the additional revenue generated from an additional unit of a factor usually becomes zero as more resources are hired.
D) the additional revenue generated from an additional unit of a factor increases as more resources are hired.
E) the additional revenue generated from an additional unit of a factor doubles every time new resources are hired.

Correct Answer:

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