If the supply of labor increases, which of the following events will occur?
A. The wage rate will increase and firms will increase employment up until the point where MRP equals the new wage rate.
B. The wage rate will increase and firms will decrease employment to the point where MRP equals the new wage rate.
C. The wage rate will fall and firms will decrease employment to the point where MRP equals the new wage rate.
D. The wage rate will fall and firms will increase employment up until the point where MRP equals the new wage rate.
Answer: D
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