If a technological improvement increases the marginal product of all workers, then the marginal revenue product of workers will _____, and the market demand curve for labor will shift:
A) increase; right.
B) increase; left.
C) decrease; right.
D) decrease; left.

Question

Quizplus · Accepted Answer

The marginal revenue product of workers increases because each worker is now more productive, leading to higher output per worker. This increase in productivity makes workers more valuable to employers, shifting the market demand curve for labor to the right as employers are willing to hire more workers at each wage level.

If a Technological Improvement Increases the Marginal Product of All