When labor supply increases,
A)the marginal productivity of workers always increases.
B)profit-maximizing firms reduce employment.
C)wages increase as long as labor supply is upward sloping.
D)wages decrease as long as labor demand is downward sloping.

Question

Quizplus · Accepted Answer

When the labor supply increases, the additional supply of workers tends to decrease the wage rate, assuming the demand for labor is downward sloping. This is because, with more workers available, employers can choose from a larger pool of candidates, reducing the need to offer higher wages to attract or retain employees.

When Labor Supply Increases