If the market wage increases, marginal cost shifts ____ and market supply ____.
A)upward; decreases
B)downward; decreases
C)upward; increases
D)downward; increases
E)upward and then downward; remains unchanged

Question

Quizplus · Accepted Answer

If the market wage increases, the marginal cost of production for firms also increases. This leads to an upward shift in the marginal cost curve. As a result, firms are less willing to supply labor at any given wage rate, leading to a decrease in the market supply of labor.

If the Market Wage Increases, Marginal Cost Shifts ____ and Market