An increase in the price of a firm's output will shift the firm's demand curve for labor to the right, other things equal

Question

Quizplus · Accepted Answer

An increase in the price of a firm's output does not shift the firm's demand curve for labor; instead, it increases the demand for labor at every wage rate, moving along the curve. The demand curve itself shifts due to changes in productivity, technology, or the price of substitute or complementary inputs, not due to changes in the price of output.

An Increase in the Price of a Firm's Output Will