Labor is a resource that is necessary to produce many goods. "if the price of labor falls," says the economist, "the prices of goods will soon follow." how does this work? if the price of labor falls, the supply of goods rises, and the prices of those goods fall. if the price of labor falls, the quantity supplied of goods rises, and the prices of those goods fall. if the price of labor falls, the demand for goods falls, and the prices of those goods fall. if the price of labor falls, the demand for goods rises, and the prices of those goods fall. if the price of labor falls, the supply of goods falls, and the prices of those goods fall.