An increase in the equilibrium price in the product market results in:

Name: An increase in the equilibrium price in the product market results in:
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Question

Quizplus · Accepted Answer

An increase in the equilibrium price in the product market leads to an increase in the demand for the product, which will increase the marginal revenue product (MRP) of labor. This will lead to an upward shift in the MRP curve, which will result in higher wages and an increase in the quantity of labor demanded. Therefore, the correct answer is C.

An Increase in the Equilibrium Price in the Product Market