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

Question

Quizplus · Accepted Answer

The decision to purchase the new automated machine will lead to a decrease in demand for labor. This is because the machine replaces the work of 30 employees, resulting in a surplus of labor. With less demand for labor, the labor-demand curve will shift to the left. With a surplus of labor, producers will have a stronger bargaining position and wages are likely to decrease. Therefore, the correct choice is B - left and wages would decrease.

If Producers Who Hire Labor in a Competitive Labor Market