When the supply of labor facing the firm is S,the firm hires L units of labor at wage w.But when the market wage rate decreases and the supply of labor shifts to S2,the firm maximizes its profit by moving along the demand for labor curve until the new wage rate w2 is equal to the marginal revenue product of labor. As a result,Lz units of labor are hired.When the supply of labor facing the firm is S1 , the firm hires L1 units of labor at wage w1 . But when the market wage rate decreases and the supply of labor shifts to S2 , the firm maximizes its profit by moving along the demand for labor curve until the new wage rate w2 is equal to the marginal revenue product of labor. As a result, L2 units of labor are hired