An improvement in technology that increases the marginal product will shift the demand for labor curve to the right.

Question

Quizplus · Accepted Answer

An improvement in technology makes the production process more efficient and increases the productivity of labor, resulting in an increased demand for labor. This shift in demand for labor results in an increase in the equilibrium wage rate and employment level. Therefore, the demand curve for labor will shift to the right.

An Improvement in Technology That Increases the Marginal Product Will