Figure 18-10
-Refer to Figure 18-10. Assume W1 = $20 and W2 = $22, and the market is always in equilibrium. A shift of the labor demand curve from D1 to D2 would

Question

Figure 18-10 
-Refer to Figure 18-10. Assume W1 = $20 and W2 = $22, and the market is always in equilibrium. A shift of the labor demand curve from D1 to D2 would

Quizplus · Accepted Answer

The shift of the labor demand curve from D1 to D2 increases the quantity of labor demanded from L1 to L2. The marginal product of labor is the change in output resulting from a one-unit increase in labor input. As the quantity of labor demanded increases, the marginal product of labor decreases. Therefore, the value of the marginal product of labor decreases by more than $2.

Figure 18-10 -Refer to Figure 18-10. Assume W1 = $20 and W2