Suppose a labor-augmenting technology were developed for a product that increased the marginal product of labor for all workers. Which of the following would happen in the labor market for this product?
A)Demand would decrease.
B)Demand would increase.
C)Supply would decrease.
D)Supply would increase.

Question

Quizplus · Accepted Answer

Labor-augmenting technology increases the marginal product of labor for all workers, which means that the productivity of workers increases. As a result, firms would demand more labor to take advantage of the higher productivity levels, leading to an increase in demand for labor. Therefore, option B is correct.

Suppose a Labor-Augmenting Technology Were Developed for a Product That