Figure 18-10

-Refer to Figure 18-10.Which of the following would shift of the labor demand curve from D₁ to D₂?

Question

Figure 18-10
 
-Refer to Figure 18-10.Which of the following would shift of the labor demand curve from D₁ to D₂?

Quizplus · Accepted Answer

Technological progress would increase labor productivity, which would shift the labor demand curve to the right from D₁ to D₂. An increase in the price of firms' output would also increase the marginal revenue product of labor, leading to an upward shift of the labor demand curve. Finally, an increase in the supply of a relevant factor of production other than labor, such as capital, would increase labor productivity and shift the labor demand curve to the right as well. Therefore, all of the choices (A), (B), and (C) would shift the labor demand curve from D₁ to D₂.

Figure 18-10 -Refer to Figure 18-10.Which of the Following Would Shift of Following