All else held constant, if a firm hires more workers, __________.

labor costs will decrease

the average product may increase or decrease

the average product will always be decreasing

the product demand curve will shift to the left

1 answer

If a firm hires more workers, the average product may increase or decrease.

This is because the average product, which is the output per worker, may initially increase due to the benefits of specialization and division of labor. However, after reaching an optimal point, adding more workers can lead to diminishing returns, where the average product starts to decline. The other options do not accurately reflect the relationship between hiring more workers and average product.