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Question 1 - The two major determinants of the firm's demand for labor are: the marginal...

Question 1 - The two major determinants of the firm's demand for labor are:

the marginal product of the labor and the competitors' wages.

the average product of labor and the price of the firm' product.

the marginal product of the labor and the price of the firm's product.

the average product of labor and the competitors' wages.
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Answer #1

Answer: Option c. The marginal product of labour and the price of firm’s product.

Explanation: When the price of the product increases marginal revenue also increases. As a result of this, the demand for labour increases when the price of the product increases.

Marginal product of labour is the addition to total product by adding one more unit of labor. When there is an increase in the marginal productivity of labor this will induce the firm to demand more labor.

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