Figure: The Value of the Marginal Product Curve
(Figure: The Value of the Marginal Product Curve) In the figure The Value of the Marginal Product Curve, if the price of the good increases and everything else stays the same, then the profit- maximizing quantity of labor:
A)will increase.
B)will decrease.
C)will stay the same.
D)cannot be determined.

Question

Quizplus · Accepted Answer

If the price of the good increases and everything else stays the same, then the value of the marginal product increases at each level of labor input. This will lead to an increase in the profit-maximizing quantity of labor. Therefore, the answer is A.

Figure: the Value of the Marginal Product Curve