Paper Pushers Inc. hires workers in a competitive labor market. Apart from labor, the company has no other variable inputs. The company's hourly output varies with the number of workers hired, as shown in the table below. If the price of each page increases, then the demand for workers will

Question

Paper Pushers Inc. hires workers in a competitive labor market. Apart from labor, the company has no other variable inputs. The company's hourly output varies with the number of workers hired, as shown in the table below.  If the price of each page increases, then the demand for workers will

Quizplus · Accepted Answer

The value of the marginal product of labor (VMPL) will increase as the price of each page increases. This means that each additional worker hired will produce more output, resulting in an increase in the demand for workers. This relationship is illustrated by the marginal revenue product (MRP) curve, which shows the additional revenue generated by each additional worker. As the MRP curve shifts upward due to the increase in the output price, the demand for workers will also shift upward.