Asked by Heather Robertshaw on Jul 18, 2024
Verified
Suppose there is a decline in the demand for the product labor is producing. Furthermore, the price of capital, which is complementary to labor, increases. Thus, the demand for labor
A) will increase.
B) will decrease.
C) may either increase or decrease.
D) will not change.
Complementary to Labor
Refers to technology or tools that enhance the productivity of workers, increasing output.
- Comprehend the elements that impact the demand and supply of labor and additional resources.
- Understand the impact of input price variations on the cost of production and business decisions for companies.
Verified Answer
MA
Melissa Amador
Jul 24, 2024
Final Answer :
B
Explanation :
The demand for labor will decrease because a decline in the demand for the product reduces the need for labor to produce that product. Additionally, an increase in the price of capital, which is complementary to labor, makes production more expensive, further reducing the demand for labor.
Learning Objectives
- Comprehend the elements that impact the demand and supply of labor and additional resources.
- Understand the impact of input price variations on the cost of production and business decisions for companies.