Connect tampa state Saved Help S O quantity of labor demanded falls Olabor suppl

Question

Connect tampa state Saved Help S O quantity of labor demanded falls Olabor supply shifts to right. O labor supply shifts left. c) The local factory is able to sell more products overseas. The labor demand curve O shifts to left since the marginal revenue product decreases. Ostays in place since the marginal revenue product does not change. O shifts to right since the marginal revenue product increases. d) A new department store opens in town to compete with existing retailers. In this case, the labor den shifts to right because there are more buyers of labor shifts to left since the supply falls. stays in place since there is no wage change

Explanation / Answer

c) As more products are being sold overseas, the rate of production has to be increased to balance the demand. This leads to more and more requirement of labour lading to the demand of labour shifting towards the right as the marginal revenue product increases.

d) Opening of a new department store cannot have any impact on the labour demand of a factory as the competition is among the retailers and not between the retailer and the factory. Thus, the labour demand stays at its place.

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