Changes in either marginal revenue (MR) or _____ will shift the demand curve for labor. A) the price of labor B) total revenue (TR) C) marginal physical product of labor (MPP_L) D) total product (TP)

Question

Quizplus · Accepted Answer

Changes in the marginal physical product of labor (MPP) will shift the demand curve for labor because the MPP reflects the additional output produced by an additional unit of labor. If the MPP changes, it affects the value of the marginal product of labor, which in turn influences the employer's willingness to hire additional labor at various wage rates.

Changes in Either Marginal Revenue (MR) or _____ Will Shift