Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The bakery will increase its demand for labor because the marginal revenue product of additional workers will rise with higher sales.
B
The bakery will decrease its demand for labor because it cannot afford to pay higher wages.
C
The bakery's demand for labor will remain the same because the productivity of existing workers will not change.
D
The bakery will hire fewer workers since higher demand leads to more automated processes.
Understanding the Answer
Let's break down why this is correct
Answer
When the bakery sees a rise in demand for its pastries, it means more customers want to buy them. To keep up with this increased demand, the owner hires additional staff, which is the bakery’s way of responding to the need for more production. The marginal product of labor refers to the extra output that each new worker can produce. If each new employee can help make more pastries, the bakery can sell even more, leading to higher profits. For example, if hiring one more baker allows the bakery to produce 50 extra pastries a day, the demand for labor increases because the bakery needs more workers to meet customer needs effectively.
Detailed Explanation
When more people want pastries, the bakery needs more workers. Other options are incorrect because This idea suggests that higher demand means higher costs; This option assumes that current workers won't change their output.
Key Concepts
Demand for Labor
Marginal Product of Labor
Marginal Revenue Product
Topic
Demand and Supply in Labor Markets
Difficulty
medium level question
Cognitive Level
understand
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