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A firm will employ more of an input whose relative price has fallen and, conversely, will use less of an input whose relative price has
A firm will employ more of an input whose relative price has fallen and, conversely, will use less of an input whose relative price has risen. Thus, a fall in the price of capital will increase the relative price of labor and thereby reduce the demand for labor. This describes the
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Microeconomics
Authors: Michael Parkin
11th edition
133019942, 978-0133020250, 133020258, 978-0133019940
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