Which of the following will lead to an outward shift in the firm's short-run demand for labor?

Question

Quizplus · Accepted Answer

An increase in the price of output will lead to an outward shift in the firm's short-run demand for labor, as the firm will see an increase in revenue and be willing and able to hire more workers to produce more output.

B, C, and D are not correct choices as they would all lead to a decrease in the firm's short-run demand for labor. Less capital per unit of labor and a decline in labor productivity would make workers less productive, meaning the firm would not need to hire as many workers to produce the same output. A reduction in average consumer income would lead to a decrease in demand for the firm's output, reducing the need to hire as many workers to produce that output.

Which of the Following Will Lead to an Outward Shift