The price of electricity consumption increased in a country.Since electricity is used for the production of various goods and services,this will lead to a(n)________,assuming all else equal.
A) downward movement along the labor demand curves of firms
B) upward movement along the labor demand curves of firms
C) leftward shift of the labor demand curves of firms
D) rightward shift of the labor demand curves of firms

Question

Quizplus · Accepted Answer

The increase in the price of electricity consumption would increase the cost of production for firms, leading to decreased profits. As a result, firms would try to reduce costs and produce fewer goods, resulting in a leftward shift of the labor demand curves of firms. This means the firms would hire fewer workers at each wage rate, leading to a decrease in employment levels.

The Price of Electricity Consumption Increased in a Country