Use the following graph,which depicts Mighty Max's labor demand for his duffel bag business,to answer the following questions.The labor demand curve shown is calculated based on a duffel bag price of $10.

-If the price increases from $10 to $20 per bag,what happens to the labor demand curve?
A) It shifts to the left.
B) It shifts to the right.
C) It remains unchanged.
D) The firm moves upward along the labor demand curve.
E) The firm moves downward along the labor demand curve.

Question

Use the following graph,which depicts Mighty Max's labor demand for his duffel bag business,to answer the following questions.The labor demand curve shown is calculated based on a duffel bag price of $10.
 
-If the price increases from $10 to $20 per bag,what happens to the labor demand curve?
A) It shifts to the left. 
B) It shifts to the right. 
C) It remains unchanged. 
D) The firm moves upward along the labor demand curve. 
E) The firm moves downward along the labor demand curve.

Quizplus · Accepted Answer

When the price of the product increases, the firm's revenue from selling the product increases, making it more profitable to produce more. This typically leads to an increase in the demand for labor to produce more products, shifting the labor demand curve to the right.

Use the Following Graph,which Depicts Mighty Max's Labor Demand for His