Which of the following statements is true?
A) The market demand curve for labor is found by adding the supply curves for labor of individual firms.
B) A firm's demand for labor is the upward-sloping portion of the MRP curve for labor.
C) The market demand for labor will change as a result of a change in the use of a complementary factor or a substitute factor.
D) The market demand curve for labor is vertical at the profit-maximizing wage.

Question

Quizplus · Accepted Answer

The market demand for labor can indeed change due to shifts in the use of complementary or substitute factors. For example, if a new technology that complements labor is introduced, the demand for labor may increase as firms seek to utilize this technology. Similarly, if a substitute for labor becomes cheaper or more efficient, the demand for labor may decrease as firms opt for the substitute. Choices A, B, and D are incorrect descriptions of labor market dynamics.

Which of the Following Statements Is True