The labor demand curve of a firm
A) will shift to the left if the price of the product that the labor is producing falls.
B) is perfectly elastic if the firm is selling its product in a purely competitive market.
C) reflects a direct relationship between the number of workers hired and the money wage rate.
D) is the same as its marginal product curve.

Question

Quizplus · Accepted Answer

A decrease in the price of the product reduces the revenue of the firm, leading to a decrease in its demand for labor. This shift results in a leftward movement of the labor demand curve.

The Labor Demand Curve of a Firm