If a firm buys its labor in a competitive market,then a short-run increase in the price of the firm's output will cause the firm to
A) offer a higher wage.
B) hire fewer workers.
C) hire more workers.
D) offer a lower wage.

Question

Quizplus · Accepted Answer

In a competitive market, if the price of a firm's output increases, the firm can generate more revenue per unit of product sold. This typically leads to an increase in production to capitalize on the higher prices, which in turn requires the firm to hire more workers to meet the increased production demand.

If a Firm Buys Its Labor in a Competitive Market,then