Final answer:
An increase in Social Security tax imposed on employers leads to a decrease in firms' demand for labor because it raises the cost of hiring workers, making them less inclined to hire more employees.
Step-by-step explanation:
The question concerns the effects of an increase in Social Security tax imposed on employers on the labor market. If we understand the labor demand curve as the quantity of labor employers wish to hire at any given wage rate, an increase in the cost of employment, such as a higher Social Security tax, would result in a decrease in the quantity of labor demanded. This is because when it costs more for firms to hire workers, they tend to hire fewer employees. Therefore, the correct answer to the question is that unlike option A, B, or E, the firms' demand for labor decreases and is represented by option C.