If the supply of labour curve is upward sloping but not vertical,and if the value of marginal product of labour increases,

Question

Quizplus · Accepted Answer

If the value of marginal product of labour increases, firms are willing to pay a higher wage rate for each unit of labour, which leads to an increase in the wage rate. However, the supply of labour also increases since individuals are willing to supply more labour at the higher wage rate. Therefore, both A and B are partially correct, but the best answer is B since it directly correlates to an increase in the marginal product of labour. Choices C, D, and E are not necessarily true based on the information given.

If the Supply of Labour Curve Is Upward Sloping but Not