-The preceding table gives monthly production information for Peter's Peanuts, a firm in a perfectly competitive industry. An increase in the wage rate for labour leads to
A) an increase in the demand for labour.
B) a decrease in the quantity of labour demanded.
C) a decrease in the demand for labour.
D) an increase in the quantity of labour demanded.

Question

-The preceding table gives monthly production information for Peter's Peanuts, a firm in a perfectly competitive industry. An increase in the wage rate for labour leads to
A) an increase in the demand for labour. 
B) a decrease in the quantity of labour demanded. 
C) a decrease in the demand for labour. 
D) an increase in the quantity of labour demanded.

Quizplus · Accepted Answer

An increase in the wage rate for labour typically leads to a decrease in the quantity of labour demanded because firms will want to hire fewer workers at higher wages to minimize costs.

-The Preceding Table Gives Monthly Production Information for Peter's Peanuts