If a firm increases the total amount of capital that is used in production, then all else equal, the marginal revenue product curve will shift _____, and the firms will hire _____ workers.
A) right; fewer
B) right; more
C) left; fewer
D) left; more

Question

Quizplus · Accepted Answer

When a firm increases its capital, productivity per worker typically increases, leading to a higher marginal revenue product of labor. This shift to the right in the marginal revenue product curve indicates that each worker is now more valuable to the firm, leading to an increase in the number of workers hired, all else being equal.

If a Firm Increases the Total Amount of Capital That