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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 price of the good increases and everything else stays the same,then the profit-maximizing quantity of labor:
A)will increase.
B)will decrease.
C)will stay the same.
D)cannot be determined.

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Use the following to answer question:
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 price of the good increases and everything else stays the same,then the profit-maximizing quantity of labor:
A)will increase. 
B)will decrease. 
C)will stay the same. 
D)cannot be determined.

Quizplus · Accepted Answer

The profit-maximizing quantity of labor is where the value of the marginal product (VMP) of labor is equal to the wage rate. If the price of the good increases, the VMP curve shifts upward, increasing the value of each additional unit of labor. Therefore, the profit-maximizing quantity of labor will increase as firms will want to hire more workers to take advantage of the higher prices.

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