If a company's productivity significantly increases, what is the most likely effect on its demand for labor?

When a company's productivity increases, it means that the workers can produce more goods or services in the same amount of time. This often leads to higher profits for the company, which might encourage them to expand their operations. As a result, the company is likely to demand more labor, hiring additional workers to keep up with the increased production needs. For example, if a factory improves its machinery and can produce twice as many toys in a day, it may need to hire more workers to manage the increased output and meet customer demand. Therefore, higher productivity usually leads to a greater demand for labor.