Suppose the Marginal Product of Labor Equals 1/L

question 75

Multiple Choice

Suppose the marginal product of labor equals 1/L.If the wage is $1 per unit of labor,what is the short-run effect on the firm's labor demand if the price of output were to double?

• A) The firm will demand half as much labor.
• B) The firm will demand twice as much labor.
• C) The firm will demand the same quantity of labor.
• D) There is not enough information to determine.

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