The marginal revenue product of labor curve will always shift to the right if
A) the wage rate rises.
B) product demand decreases and product price decreases.
C) product demand increases and product price increases.
D) the price of capital rises.

Question

Quizplus · Accepted Answer

The marginal revenue product of labor curve shifts to the right when product demand increases and product price increases because the value of the additional output produced by labor is higher, making firms willing to hire more labor at each wage rate.

The Marginal Revenue Product of Labor Curve Will Always Shift