Assuming labor is a variable input,an increase in labor productivity will result in

Question

Quizplus · Accepted Answer

An increase in labor productivity means that more output can be produced with the same amount of labor input. This results in a decrease in the marginal cost (MC) curve as the cost to produce each additional unit of output decreases. Therefore, option B is the correct answer. Option A is incorrect as an increase in labor productivity would result in an upward shift in the MPP curve indicating that each unit of labor is now producing more output. Option C is also incorrect as an increase in productivity would typically lower the average total cost (ATC) curve as fixed costs are spread over more output.

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