If the market price of the product that employs labor in production increases: t
ID: 1129728 • Letter: I
Question
If the market price of the product that employs labor in production increases:
the marginal revenue product of labor increases.
the marginal product of labor increases.
the demand curve for labor shifts to the left.
the price of labor decreases.
the supply curve of labor shifts to the left.
A.the marginal revenue product of labor increases.
B.the marginal product of labor increases.
C.the demand curve for labor shifts to the left.
D.the price of labor decreases.
E.the supply curve of labor shifts to the left.
Explanation / Answer
Answer.) A.) the marginal revenue product of labor increases.
Remember that Marginal Revenue Product also known as the marginal value product, is the market value of one additional unit of output. Therefore, the marginal revenue product of labor will be Marginal Product of labor multiplied by Price of the product. Now, If price of the product rises, the marginal revenue product of labor also increases.