If the wage rate in a purely competitive labor market increases, it will cause the
A) marginal resource cost curve for a single competitive firm in the industry to shift down.
B) marginal resource cost curve for a single competitive firm in the industry to shift up.
C) labor supply curve for a single competitive firm to shift downward.
D) labor supply curve for the industry to shift rightward.

Question

Quizplus · Accepted Answer

In a purely competitive labor market, an increase in the wage rate means that the cost of hiring an additional unit of labor (marginal resource cost) increases for a single competitive firm, causing the marginal resource cost curve to shift up.

If the Wage Rate in a Purely Competitive Labor Market