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Figure: The Value of the Marginal Product Curve
-(Figure: The Value of the Marginal Product Curve)Use Figure: The Value of the Marginal Product Curve.In the figure,if the market wage rate increases,then the:
A) VMPL curve will shift to the right.
B) profit-maximizing quantity of labour will increase.
C) VMPL curve will shift to the left.
D) profit-maximizing quantity of labour will decrease.

Question

Use the following to answer questions :
Figure: The Value of the Marginal Product Curve 
-(Figure: The Value of the Marginal Product Curve)Use Figure: The Value of the Marginal Product Curve.In the figure,if the market wage rate increases,then the:
A) VMPL curve will shift to the right. 
B) profit-maximizing quantity of labour will increase. 
C) VMPL curve will shift to the left. 
D) profit-maximizing quantity of labour will decrease.

Quizplus · Accepted Answer

If the market wage rate increases, the cost of hiring additional labor increases, leading firms to hire less labor to maximize profit, thus decreasing the profit-maximizing quantity of labor.

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