The Figure Given Below Represents Equilibrium in the Labor Market

question 29

Multiple Choice

The figure given below represents equilibrium in the labor market with the demand and supply curves of labor.Figure 14.6
In the figure,
D = MRP implies demand for labor = Marginal Revenue Product
MFC represents Marginal Factor Cost curve
S represents the supply curve of labor

-If resource A and resource B are substitutes of each other and the price of resource A increases, then:

• A)the price elasticity of demand for resource B will increase.
• B)the demand for resource A will increase.
• C)the demand for resource B will increase.
• D)the price elasticity of demand for resource B will decrease.
• E)the demand for resource B will decrease.

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