A Major Computer Software Company Maintains a Technical Support Center

Multiple Choice

A major computer software company maintains a technical support center in a rural area and is the only employer in this region. Suppose the firm develops a new software system for managing technical support calls, and the marginal product of labor increases. What happens to the equilibrium outcome in this labor market?

A) Labor demand shifts rightward, equilibrium wage and employment levels decline.
B) Labor demand shifts rightward, equilibrium wage and employment levels increase.
C) Labor demand curve remains the same, equilibrium wage and employment levels increase.
D) Labor demand curve remains the same, equilibrium wage and employment do not change.
E) none of the above