Multiple Choice QuestionFirms operating in pure competitive markets have resource demand curves that slope downward because of diminishing Blank______.Multiple choice question.marginal utilitymarginal returnsrevenuescosts

The correct answer is "marginal returns".

Step 1: Understand the question. The question is asking why firms in purely competitive markets have resource demand curves that slope downward.

Step 2: Understand the options.

• Marginal utility refers to the additional satisfaction a consumer gets from having one more unit of a good or service.
• Marginal returns refer to the additional output that can be produced by adding one more unit of a specific input, while holding other inputs constant.
• Revenues refer to the income that a business has from its normal business activities, usually from the sale of goods and services to customers.
• Costs refer to the amount that needs to be spent to buy, produce or do something.

Step 3: Choose the correct answer. In this case, the correct answer is "marginal returns". This is because as a firm continues to add more of a resource while holding other resources constant, the additional output produced by the last unit of resource added will eventually start to decrease. This is known as the law of diminishing marginal returns. As a result, the firm will be willing to pay less for each additional unit of the resource, causing the resource demand curve to slope downward.

The correct answer is "marginal returns".

Step 1: Understand the question. The question is asking why firms operating in purely competitive markets have resource demand curves that slope downward.

Step 2: Analyze the options. We have four options: marginal utility, marginal returns, revenues, and costs.

Step 3: Apply economic theory. In economics, the law of diminishing marginal returns states that as more of a variable input is added to a fixed input, at some point, the additional output produced from that additional input will fall. This is why the resource demand curves slope downward in a purely competitive market.

So, the correct answer is "marginal returns".