6. Refer to the above graph. What will shift D 2 to D 1 ? An increase in product

Question

6. Refer to the above graph. What will shift D2 to D1?

An increase in productivity

A decrease in product demand

A decrease in the price of complementary input

An increase in the price of a substitute input (if the substitution effect is greater than the output effect)

An increase in productivity

A decrease in product demand

A decrease in the price of complementary input

An increase in the price of a substitute input (if the substitution effect is greater than the output effect)

Explanation / Answer

Answer
A decrease in product demand
the decrease in product demand decreases demand for labor and that will shift the demand curve to the left which decreases wage and quantity of labor.

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