If productivity in a firm increases, what is the most likely effect on the demand for labor?

When productivity in a firm increases, it usually means that workers can produce more goods or services in the same amount of time. This increase in efficiency can lead to higher profits for the firm, which may make them more willing to hire additional workers. As the firm grows and needs more help to keep up with production, the demand for labor tends to rise. For example, if a factory installs new machinery that allows workers to produce twice as many toys in a day, the factory might need to hire more workers to meet the increased demand for those toys. Therefore, higher productivity often leads to an increase in the demand for labor.