Which of the following will increase the market demand for labor,ceteris paribus?

Question

Quizplus · Accepted Answer

An increase in the productivity of labor will mean that firms are able to produce more output with the same amount of labor. This will increase the value of labor to firms and make them willing to hire more workers at a given wage. Therefore, an increase in labor productivity will increase the demand for labor.

Note:
A) is incorrect because a decrease in the price of output will decrease the revenue of firms, making them less willing to hire workers.
C) is incorrect because an increase in wages will increase the cost of labor for firms, making them less willing to hire workers.
D) is incorrect because a decrease in available workers could potentially increase wages, but it will not necessarily increase the demand for labor.

Which of the Following Will Increase the Market Demand for Labor,ceteris