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Figure: The Value of the Marginal Product Curve
-(Figure: The Value of the Marginal Product Curve)Use Figure: The Value of the Marginal Product Curve.In the figure,if the market wage rate increases,then the:
A)VMPL curve will shift to the right.
B)profit-maximizing quantity of labor will increase.
C)VMPL curve will shift to the left.
D)profit-maximizing quantity of labor will decrease.

Question

Use the following to answer question:
Figure: The Value of the Marginal Product Curve 
-(Figure: The Value of the Marginal Product Curve)Use Figure: The Value of the Marginal Product Curve.In the figure,if the market wage rate increases,then the:
A)VMPL curve will shift to the right. 
B)profit-maximizing quantity of labor will increase. 
C)VMPL curve will shift to the left. 
D)profit-maximizing quantity of labor will decrease.

Quizplus · Accepted Answer

An increase in the market wage rate makes hiring additional workers more expensive for firms. As a result, firms will reduce the quantity of labor they hire to maximize profits, leading to a decrease in the profit-maximizing quantity of labor. The VMPL curve itself does not shift due to changes in the wage rate; instead, the firm's position along the existing VMPL curve changes.

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