When the price of the good or service it produces rises, the firm's
A) demand for labour curve shifts rightward.
B) output decreases.
C) demand for labour curve shifts leftward.
D) demand for labour curve remains unchanged.

Question

Quizplus · Accepted Answer

When the price of the good or service a firm produces rises, the firm can generate more revenue from selling its products. This often leads to an increase in production to capitalize on the higher prices, which in turn increases the demand for labor to produce the additional output, causing the demand for labor curve to shift rightward.

When the Price of the Good or Service It Produces