Assuming labor is a variable input,an increase in labor productivity will result in
A)A downward shift in the MPP curve.
B)A downward shift in the MC curve.
C)An upward shift in the ATC curve.
D)A downward shift in the production function.

Question

Quizplus · Accepted Answer

An increase in labor productivity means that each worker is more efficient, producing more output per hour. This efficiency reduces the marginal cost (MC) of producing each additional unit of output, because less labor (cost) is needed per unit of output, leading to a downward shift in the MC curve.

Assuming Labor Is a Variable Input,an Increase in Labor Productivity