Within the diagram, D shows the long-run demand curve for labour for a firm that operates in an imperfect market. If the quantity of capital invested per worker decreases, the marginal revenue productivity of labour (MRP) curve moves from MRP1 to MRP2. How does this change affect the quantity of labour employed in the long run, when wages fall?
- AIt falls from L3 to L2.
- BIt increases from L1 to L2.
- CIt increases from L2 to L3.
- DIt remains the same at L1.