Refer to the above graph.If the MRC decreased:
A) quantity would increase.
B) quantity would decrease.
C) the firm would operate as a monopsonist.
D) the firm would increase the supply of labor.

Question

Refer to the above graph.If the MRC decreased:
A) quantity would increase. 
B) quantity would decrease. 
C) the firm would operate as a monopsonist. 
D) the firm would increase the supply of labor.

Quizplus · Accepted Answer

According to the graph, a decrease in MRC would make the marginal cost of labor lower for the firm. As a result, the firm would be willing to hire more workers at every wage level, leading to an increase in the quantity of labor demanded.

Refer to the Above Graph.If the MRC Decreased