If producers who hire labor in a competitive labor market decide to purchase the new automated machine that completes the work of 30 employees,in the short run we would expect the:

Question

Quizplus · Accepted Answer

The introduction of the automated machine would increase productivity and reduce the demand for labor in the short run. This would result in a leftward shift of the labor-demand curve and a decrease in wages. It would not affect the supply of labor, so option A and C can be eliminated. Option B is incorrect because the labor-demand curve shifts to the left, not the right.

If Producers Who Hire Labor in a Competitive Labor Market