Refer to the Graphs Shown

Refer to the graphs shown. If product demand increases from D₁ to D₂, causing the product price to increase, firm A (a supplier of this product) will:

A) pay a higher wage rate and reduce employment from q2 to q1.
B) pay a lower wage rate and increase employment from q₃ to q₄.
C) increase employment because its MRP curve will shift rightward.
D) decrease employment because its MRP curve will shift leftward.

Correct Answer:

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