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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.

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Use the following to answer questions:
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.

Quizplus · Accepted Answer

When the price of the good increases, the value of the marginal product of labor increases, leading firms to hire more labor to maximize profits.

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