If the price of the product produced by labor increases, the marginal revenue product of labor curve will
A) be unaffected because productivity of labor has not changed.
B) shift to the left.
C) shift to the right.
D) become more elastic.

Question

Quizplus · Accepted Answer

The marginal revenue product of labor curve will shift to the right because the increase in the price of the product increases the value of the output produced by each worker, thus increasing the marginal revenue product of labor.

If the Price of the Product Produced by Labor Increases