Assuming all else equal,if the marginal product of labor rises,________.
A) the labor demand curve shifts to the right
B) the labor demand curve shifts to the left
C) there is a upward movement along the labor demand curve
D) there is a downward movement along the labor demand curve

Question

Quizplus · Accepted Answer

A rise in marginal product of labor indicates that the additional output produced by the last unit of labor has increased. Therefore, the firm is willing to hire more workers at any given wage rate. This implies that the labor demand curve shifts to the right, reflecting an increase in demand for labor.

Assuming All Else Equal,if the Marginal Product of Labor Rises,________