Figure 18-8 This figure below shows the labor market for automobile workers. The curve labeled S is the labor supply curve, and the curves labeled D 1 and D 2 are the labor demand curves. On the horizontal axis, L represents the quantity of labor in the market. -Refer to Figure 18-8. Which of the following events would most likely explain a shift of the labor-demand curve from D₂ back to D₁? A)The price of automobiles decreased. B)A large number of immigrants entered the automobile-worker market. C)A technological advance increased the marginal product of automobile workers. D)The demand for automobiles increased.

Question

Quizplus · Accepted Answer

A decrease in the price of automobiles would reduce the revenue generated from selling them, leading to a decrease in the demand for labor, shifting the labor-demand curve from D2 back to D1.

Figure 18-8 This Figure Below Shows the Labor Market for Automobile Workers