What could cause an increase in a perfectly competitive firm's demand for labour?
A)A decrease in the market wage rate.
B)An increase in the amount of human capital among the labour force.
C)An increase in the supply of labour.
D)A decrease in the market price of the product the firm produces.

Question

Quizplus · Accepted Answer

An increase in the amount of human capital among the labour force will make workers better suited for the firm's production processes, increasing the productivity of the labour input. This will increase the marginal product of labour, causing the firm to demand more labour at any given wage rate.

What Could Cause an Increase in a Perfectly Competitive Firm's