Multiple Choice
Figure 16-2 shows the marginal revenue product for Becca's Baubles, a producer of hand-beaded bracelets.
-Refer to Figure 16-2. Suppose the market price of bracelets falls to $2. What happens to the curve given in the diagram?
A) Nothing, because labor's productivity has not changed.
B) There will be a movement along the curve.
C) The curve shifts to the left.
D) We cannot answer the question without knowing if Becca would want to hire more workers.
Correct Answer:
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