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(1) In terms of supply and demand analysis, what are some factors that could have caused the hypothesized fall in wages from W0 to W1 for this organization.

(2) Why would the organization represented in the firm want to increase its labour input to L1.

(3) How would it be possible for the organization to increase its labour input to L1, without having to increase wages to attract workers.

(4) From my understanding the shift from MRPL0 to MRPL1 can be the result of an increase in the scale of production (please correct me if I am wrong). In terms of factors of production, what does an increase in the scale of production and the shift of the MRPL curve to the right imply and what could have happened to bring this change about.

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(1) In terms of supply and demand analysis, what are some factors that could have caused the hypothesized fall in wages from W0 to W1 for this organization.
In terms of supply and demand analysis some factors that could have caused the fall in wages from W0 to W1 could have been a decrease in the wage rate and the value of the marginal product. The other reasons for a fall in wages could have been a sudden immigration of workers from another country, or large scale layoffs. Further, liquidation of several firms could also lead to a rightward shift in the supply of labor. The fall in wages could have been caused because of a seasonal increase of labor (e.g. increased labor during holiday time).
From the point of view of demand and supply analysis the firm tends to use more labor because at the same wages more labor is available. This can be used to increase production and earn more profits. The equilibrium point has changed, this is why more labor is used after the increase in supply of labor.

(2) Why would the organization represented in the firm want to ...

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