The demand curve for labor of a competitive firm, MRPL1 in (a), takes the product price as given.
But as the wage rate falls from $15 to $10 per hour, the product price also falls.
Thus the firm’s demand curve shifts downward to MRPL2. As a result, the industry demand curve, shown in (b), is more inelastic than the demand curve that would be obtained if the product price were assumed to be unchanged.