An increase in the wage rate causes
A) a rightward shift of the firm's labour demand curve.
B) a leftward shift of the firm's labour demand curve.
C) a decrease in the quantity of labour demanded.
D) an increase in labour's marginal productivity.

Question

Quizplus · Accepted Answer

An increase in the wage rate leads to a decrease in the quantity of labor demanded, as firms will hire fewer workers at higher wages, moving along the demand curve rather than shifting it.

An Increase in the Wage Rate Causes