If a perfectly competitive firm finds that the productivity of its workers has increased,then

Question

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An increase in worker productivity leads to a decrease in the firm's production costs. This then enables the firm to increase its output and, consequently, its profits if it sells its products at the same price. To increase output, the firm needs to employ more labor, resulting in an increase in labor demand. Therefore, if a perfectly competitive firm finds that the productivity of its workers has increased, labor demand increases.

If a Perfectly Competitive Firm Finds That the Productivity of Its