If the Wage Rate in a Purely Competitive Labor Market

question 35

Multiple Choice

If the wage rate in a purely competitive labor market increases,it will cause the:

• A) marginal resource cost curve for a single competitive firm in the industry to shift rightward.
• B) marginal resource cost curve for a single competitive firm in the industry to shift leftward.
• C) labor supply curve for a single competitive firm to shift downward.
• D) labor supply curve for the industry to shift rightward.

---

Definitions:

Marginal Revenue

The additional income received from selling one more unit of a good or service; it's a critical concept in business and economics for understanding how to maximize profit.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, resulting in the cost per unit of production decreasing with increasing scale.

Average Total Cost Curve

Illustrates the average cost per unit of output, combining both fixed and variable costs, at different levels of production.

Profit-maximizing Monopolist

A monopolist who determines the quantity of output and price levels that result in the highest possible profits, given its unique market power.