An increase in the demand for labor will shift the labor demand curve to the right, creating a shortage at the original wage. This will put upward pressure on the equilibrium wage causing the quantity of labor supplied to increase. The value of the marginal product rises because MRPL = P x MPL (and either P or MPL have risen to cause the demand for labor to rise). This implies that both the wage and the value of the marginal product are now higher.
A decrease in the demand for labor, will shift the labor demand curve to the left, creating a surplus at the original wage. This will put downward pressure on the equilibrium wage causing the quantity of labor supplied to decrease. The value of the marginal product falls because MRPL = P x MPL (and either P or MPL have risen to cause the demand for labor to rise MRPL = P x MPL (and either P or MPL have fallen to cause the demand for labor to decline). This implies that both the wage and the value of the marginal product are now lower.
An increase in the supply of labor would shift the supply curve to the right, creating a surplus of workers at the original wage. This will put downward pressure on the equilibrium wage causing the quantity of labor demanded to rise. As the number of workers employed rises, the marginal product of labor falls due to the diminishing marginal product of labor. Thus, both the wage and the value of the marginal product of labor are now lower.
An decrease in the supply of labor would shift the supply curve to the left, creating a shortage of workers at the original wage. This will put upward pressure on the equilibrium wage causing the quantity of labor demanded to fall. As the number of workers employed falls, the marginal product of labor rises due to the diminishing marginal product of labor. Thus, both the wage and the value of the marginal product of labor are now higher.
A decrease in the demand for labor, will shift the labor demand curve to the left, creating a surplus at the original wage. This will put downward pressure on the equilibrium wage causing the quantity of labor supplied to decrease. The value of the marginal product falls because MRPL = P x MPL (and either P or MPL have risen to cause the demand for labor to rise MRPL = P x MPL (and either P or MPL have fallen to cause the demand for labor to decline). This implies that both the wage and the value of the marginal product are now lower.
An increase in the supply of labor would shift the supply curve to the right, creating a surplus of workers at the original wage. This will put downward pressure on the equilibrium wage causing the quantity of labor demanded to rise. As the number of workers employed rises, the marginal product of labor falls due to the diminishing marginal product of labor. Thus, both the wage and the value of the marginal product of labor are now lower.
An decrease in the supply of labor would shift the supply curve to the left, creating a shortage of workers at the original wage. This will put upward pressure on the equilibrium wage causing the quantity of labor demanded to fall. As the number of workers employed falls, the marginal product of labor rises due to the diminishing marginal product of labor. Thus, both the wage and the value of the marginal product of labor are now higher.
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