An increase in labor productivity will shift

Question

Quizplus · Accepted Answer

An increase in labor productivity would result in higher marginal product of labor (MPL), which in turn would shift the marginal revenue product (MRP) curve to the right. This is because with higher MPL, the additional output produced by an additional unit of labor would be more valuable, giving rise to a higher MRP. Conversely, the marginal factor cost (MFC) curve would remain unchanged as productivity is unrelated to the cost of additional labor.

An Increase in Labor Productivity Will Shift