PPSCFPSCNTSPakistan govt jobs
- Subject
- Labour Marketeconomics-mcqs › labour-market
- Published
- 1 Jun 2019
- Last updated
- 28 May 2026
Under which circumstance is the Marginal Revenue Product expected to be insensitive to changes in wages?
Multiple choice question for Labour Market. Select an option, then review the explanation below.
Explanation
The Marginal Revenue Product tends to be wage inelastic when the final product faces many substitutes, as firms have limited ability to increase output profitably by hiring more labor. This reduces the sensitivity of labor demand to wage changes.
More Labour Market MCQs
Practice related questions from the same subject.
- 1.How do unions typically contribute to widening the wage gap between union members and non-union workers?
- 2.Under which circumstance can unions enhance efficiency?
- 3.Which of the following reasons explains why companies might choose to pay efficiency wages?
- 4.Which of the following government actions is least likely to decrease the unemployment rate?
- 5.What happens if the wage rate is set above the competitive equilibrium wage for any reason?