If the firms in an industry could take advantage of a reduced wage, how would one best describe the firms' demand for labor? The MRP_L: A) schedule would remain unchanged, and the firms would hire more labor at the lower wage. B) schedule would shift to the left and the firms would move down the new schedule. C) schedule would shift to the right and the firms would move down the new schedule. D) none of the above

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Quizplus · Accepted Answer

The MRPS (Marginal Revenue Product of Labor Schedule) would remain unchanged because it reflects the additional revenue a firm earns from hiring one more unit of labor, assuming product prices and productivity remain constant. A reduced wage does not change the productivity or the revenue generated per unit of labor; it simply means that labor is cheaper, so firms would hire more labor at the lower wage without the MRPS itself changing.

If the Firms in an Industry Could Take Advantage of a Reduced