What will happen if labour productivity is increased?

Rakesh Yadav • 4.99K Points
Extraordinary Economic

Q. What will happen if labour productivity is increased?

(A) Balanced cash wage will decrease
(B) Competitive firms will be forced to invest more
(C) Labour demand curve will shift towards right
(D) None of the above.

Correct Answer - Option(C)

Explanation by: Rakesh Yadav

If there is low marginal labour production, 
then after giving wages there will be profit from marginal labourer. Ultimately, demand of labour will increase and labour demand curve will shift towards right.

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