Because marginal revenue product reflects productivity, increases in productivity directly shift
A) input supply curves to the left.
B) input demand curves to the left.
C) input supply curves to the right.
D) input demand curves to the right.

Question

Quizplus · Accepted Answer

Increases in productivity make an input more valuable to a firm, thus increasing the firm's willingness to pay for an additional unit of the input. This is reflected in a rightward shift of the input demand curve.

Because Marginal Revenue Product Reflects Productivity, Increases in Productivity Directly