Labor Productivity and Average Variable Cost
Suppose a government policy increases the wage rate while also implementing a worker training program that enhances labor productivity. What are the likely resulting changes to the marginal product of labor (MPL) and the average variable cost (AVC)?
A
MPL increases moderately while AVC increases.
B
Both MPL and AVC decrease.
C
MPL remains unchanged while AVC decreases.
D
MPL decreases and AVC decreases.
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