If the price of a good increases, then in the market for the type of labor needed to produce this good,
A) employment will decrease.
B) the labor supply will increase.
C) the marginal product (MP) of labor will increase.
D) the marginal revenue product (MRP) of labor will increase.

Question

Quizplus · Accepted Answer

The marginal revenue product (MRP) of labor is the additional revenue generated from employing one more unit of labor. If the price of the good increases, the revenue from selling additional units of the good also increases, thus increasing the MRP of labor.

If the Price of a Good Increases, Then in the Market