For a firm in the long-run,an increase in the market wage rate will cause it to reduce the employment of labor.With fewer workers,the firm's marginal revenue product for capital

Question

Quizplus · Accepted Answer

As the market wage rate increases, the firm will reduce its employment of labor. This means that the firm's production function will shift downward, leading to a decrease in the marginal revenue product of capital. As a result, the firm will use less capital to produce its output.

For a Firm in the Long-Run,an Increase in the Market