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If the inputs, K and L, are perfect complements, then the isoquants will be L-shaped rather than curved. Demonstrate in a graph that in this
If the inputs, K and L, are perfect complements, then the isoquants will be L-shaped rather than curved. Demonstrate in a graph that in this case an increase in the wage rate will cause only a scale effect on labor demand and no substitution effect. Will there be any difference between the long-run and short-run labor demand curves?
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