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Figure: The Value of the Marginal Product Curve
-(Figure: The Value of the Marginal Product Curve) In the figure The Value of the Marginal Product Curve, if a technological advance makes labor more productive and everything else stays the same, then the profit-maximizing quantity of labor:
A) will increase.
B) will decrease.
C) will stay the same.
D) cannot be determined.

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Use the following to answer questions:
Figure: The Value of the Marginal Product Curve 
-(Figure: The Value of the Marginal Product Curve) In the figure The Value of the Marginal Product Curve, if a technological advance makes labor more productive and everything else stays the same, then the profit-maximizing quantity of labor:
A) will increase. 
B) will decrease. 
C) will stay the same. 
D) cannot be determined.

Quizplus · Accepted Answer

A technological advance that makes labor more productive increases the value of the marginal product of labor, leading firms to hire more labor to maximize profits.

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