An increase in the price of a firm's output will shift the firm's demand curve for labour to the right, other things being equal.

Question

Quizplus · Accepted Answer

If a firm increases the price of its output, it will generate higher revenue, which may lead to an increase in production. As a result, more labour will be required to produce goods and services. This will shift the demand curve for labour to the right, indicating that the firm is willing to hire more workers at each wage level. Therefore, the statement is true.

An Increase in the Price of a Firm's Output Will