Final answer:
When demand for BMWs increases due to a successful ad campaign, both the equilibrium wage and the quantity of labor in the labor market are expected to increase.(option c) This is because more workers are needed to meet the heightened production demands.
Step-by-step explanation:
When BMW runs an ad campaign that successfully increases the demand for their cars, resulting in a higher price for BMWs, this typically leads to an adjustment in the labor market that supplies the workforce for BMW's production. An increase in demand for BMW cars suggests that production will need to ramp up to meet consumer interest, which in turn implies the company will require more labor to manufacture the additional vehicles.
Therefore, the equilibrium wage (price of labor) is expected to increase because the company values the additional laborers to meet the higher demand for its product. At the same time, the quantity of labor (number of workers) employed is also expected to increase to facilitate the production of the additional vehicles needed to satisfy the elevated demand.
This scenario aligns with the following option: The equilibrium price (wage) and quantity of labor will both increase.