If the price of the product produced by labor decreases, 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 inelastic.

Question

Quizplus · Accepted Answer

The marginal revenue product of labor curve will shift to the left because the value of the output produced by each additional worker (marginal product) decreases when the price of the product decreases. This means each additional unit of labor adds less revenue than before, leading to a leftward shift in the curve.

If the Price of the Product Produced by Labor Decreases